An alternative stability pact for the European Union

This paper proposes an alternative stability and growth pact to the one which accompanied the introduction of the euro in January 1999. The latter is part of the third stage of economic and monetary union and, will govern the economic policies of the member countries which have joined the single currency and strongly constrain the policies of those who do not join. The alternative proposed in this paper is a Full Employment, Growth and Stability Pact and would have a number of features, the most important of which is the creation of new institutional arrangements, including the creation of an investment, bank.