Living in the EMU. The Dynamics of the Maastricht Treaty's Fiscal Rules

This paper examines the macroeconomic implications of the Maastricht Treaty's fiscal rules for the European monetary union's member countries, and shows that these rules are technically inconsistent in that they may fail to achieve their declared goal, namely convergence of fiscal aggregates and stability of public debts. Alternatively to the fixed-rules approach of the Maastricht Treaty, the paper suggests for further development a country-by-country system of control of public debt sustainability.