ABSTRACT
This chapter demonstrates that the balance of the economic forecasts indicates a relatively neutral impact upon the Euroland economy at best, and at worst the combination of convergence criteria and inflation-obsessed European Central Bank (ECB) results in decades of slow growth and persistently high levels of unemployment. It examines whether the creation and maintenance of a social market is consistent with the demands made upon individual economies by the form of Economic and Monetary Union (EMU) adopted by the EU member states in the Treaty on European Union (TEU). The stringent conditions applied to fiscal policy under EMU by the convergence criteria and Stability and Growth Pact (SGP) effectively prevents the construction of Euro-Keynesianism and its use to drastically reduce EU unemployment. The desired expansion of social protection and labour regulation, as fundamental elements of a new Euroland social market approach, appear contrary to the available evidence.
