Commission paper highlights euro challenges

"EMU: The First two years" released March 2001 by the European Commission's DG economic and financial affairs reviews the first two years of the euro's existence. The Commission's tone is generally upbeat, but the paper points to several "challenges" which face the euro-area authorities.

On monetary policy the paper argues that the ECB's key difficulty will be with smaller euro-area countries whose inflation performance is actually diverging from the larger economies. The report also reviews

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