THE IMPORTANCE OF MONETARY POLICY FOR ENSURING MACROECONOMIC SUSTAINABILITY

Vollständiger Abstract

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Monetary policy is crucial for ensuring macroeconomic sustainability, because it affects inflation, interest rates, and employment. In the EU, the common monetary policy of the European Central Bank (ECB) has a significant impact on stability, while the fiscal policies of member states remain independent. This often leads to a mismatch between monetary and fiscal discipline, which became particularly evident during the public debt crises in countries such as Greece and Italy. Although the ECB controls interest rates and the money supply, the fiscal policies of individual states can lead to excessive borrowing, which threatens the stability of the euro. To ensure long-term sustainability, better coordination between monetary and fiscal policy is needed, along with the possibility of creating a fiscal union within the EU, which would enable better control of excessive borrowing and greater coordination of economic policies.