Ladies and gentlemen, to ensure success of policy coordination we need either of the following: •  A continuous interaction between the fiscal and monetary authorities to decide jointly on aspects relating to policy design and implementation, or;  •  A set of rules and procedures that minimize the need for frequent interaction.
But we know all these, why was the EU zone not successful? As noted by Sargent and Wallace in their famous article “Some unpleasant monetarist arithmetic”, “tighter money today leads to higher inflation not only eventually but starting today”.