on of the European Monetary Institute or EMI in Frankfurt, Germany. The EMI was the beginning of the proposed European Central Bank. The EMI was created to hold the gold and foreign exchange reserves, and oversee the operation of the European Monetary System, and to promote the use of the ECU and the transition from ECUs to Euros. Its future responsibilities are to implement a common European monetary policy, conduct foreign exchange operations, and hold reserves of member countries. While it's working to achieve those goals, the EMI is also supposed to monitor some other economic convergence criteria among member countries, which included exchange rates, inflation, government debt, and interest rates. To be allowed to joined the new monetary union, as stated by the EMI in 1999 countries needed to have the following criteria by end 1997: "price stability" or A rate of inflation of the consumer price index not more than 1.5- percent points about the three member countries with the lowest inflation rates. Have kept its currency within the normal margins around its fixed value in terms of the ECU and to have not devalued against any other member country for two years. Long-term interest rates not more than 2 percent above the three member countries with the lowest rates of inflation. A government deficit that is not "excessive", or a government deficit that doesn't exceed 3 percent of yearly gross domestic product, and the value of outstanding government debt doesn't exceed 60 percent of yearly gross domestic product.However, meeting the criteria has led to considerable activity in the area of government statistics fudging. How much fudging is allowed is up to the EMI and the European Commission to decide, and investigate.A good example of this statistical changing is the case of France. They counted a current pension fund surplus as government income, thus reducing the calculated government deficit. Of course, just as in the United ...
