Real divergence across Europe and the limits of EMU macroeconomic governance

The paper focuses on the absence in the European Monetary Union of the appropriate institutional setting for tackling the real convergence problem after the successful achievement of nominal convergence. The main argument is that an EMU macroeconomic governance with a common monetary policy but national fiscal policies is not viable, as harsher market competition would require the strengthening of fiscal coordination across Europe, also to cope with widening macroeconomic performances between the Core and the Periphery.