SEPPO HONKAPOHJA is a Professor of International Macroeconomics at the University of Cambridge, UK. He was previously Professor of Economics at the University of Helsinki, Finland. He has published extensively in economics journals and is author of the Book Learning and Expectations in Macroeconomics, with George W. Evans. In 2002-2007 he served as member and Chairman of the European Economic Advisroy Group at CESifoFRANK WESTERMANN is a Professor of International Economic Policy at the University of Osnabrueck, in Germany. He was previously Assistant and Associate Professor at the University of Munich. He is author of Boom-Bust Cycles and Financial Liberalization, with Aaron Tornell. In 2002-2005 he served as the Secretary General of the European Economic Advisroy Group at CESifo

Introduction  PART I: LABOUR MARKETS Welfare to Work Labour Market Reform in Europe Pay-Setting Systems in Europe Outsourcing Longer Working Hours PART II: MACROECONOMIC ISSUES Fiscal Policy and Macroeconomic Stabilization in the Euro Area The Road to the Euro Convergence and Divergence in Economic Growth in the EU Global Imbalances PART III: INSTITUTIONS Rethinking Subsidiarity in the EU Financial Architecture Pensions and Children Education Systems in the EU Competition Policy