ABSTRACT
Whilst it was always obvious that a European single currency would have significant implications for the conduct of monetary policy, the impacts of Economic and Monetary Union on fiscal policy were much less widely appreciated, until governments began to cut budgets to qualify for currency membership. This chapter addresses the relationship between Economic and Monetary Union and the costs of member states’ housing policies. The second section outlines the European Commission’s economic rationale for constraining budget deficits within a monetary union, and the third outlines the institutional mechanisms for achieving this goal. The fourth section examines the current fiscal position of the member states and the fifth examines strategies which have been adopted, or may be adopted, to limit public expenditure on housing. Conclusions are drawn in the sixth and final section.
