Efficiency, Stability and Equity

In 1986 the Commission of the European Communities invited an independent group of distinguished economists and political scientists to reflect on how the economic system of the Community needed to evolve in the light of three recent political decisions - enlargement to include Spain and Portugal, adoption of the objectives for completing the internal market by 1992, and the signing of the Single European Act which allows for more majority voting in Community decision-making. The report of this group, completed in 1987, is now available in published form. It concludes that there are important links extending from these recent decisions into needs for the development of the European Monetary System and reform of the Community budget. More broadly, the report offers a comprehensive model for the evolution of the Community's economic system in the 1990s, drawing on the main insights of modern trade theory, open-economy macroeconomics, and the economics of multi-tier government.