Priorities of Economic Policy and European Imbalances

This thesis reviews priorities of the Euroarea economic policy in the context of the Euro crisis and also it analyzes the development of the Eurozone balance of payments disequilibria. Special attention is paid to this topic only in recent years in connection with the Euro crisis and its causes while basic rules of the European Monetary Union's (EMU) economic policy have been approved at the beginning of this century and external and internal imbalances within the Eurozone started to grow much earlier than 2010. The aim of this research is to determine and explain causal relationships between different priorities of economic policies of the Euroarea countries and their economic development. Special attention is paid to the external balance since the current crisis has revealed an important connection between external and internal imbalances within the Eurozone.To fulfill the aim of the thesis, the author investigates current priorities and instruments of economic policy and describes effects of fiscal and monetary policies. Also,the work explores more in details recent economic policies in Europe and their outcomes and analyzes economic policies' effects on the Euroarea balance of payments.