Empirical studies on the framework for coordination of monetary and fiscal policy in EU.

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European Economy has steadily grown since introduction of the Euro, because trade and investments intro EU area increased, and massive capital inflows from extra-EU area and exports to extra-EU also increased. Introduction of common currency, the Euro, which wipes out exchange rate risk for intra-Euro area, not only brings about positive effects of intra-trade, but also attracts extra-Euro area transactions.However, member countries of EU and European commission cannot help count macroeconomic policies for economic stability, because adjustment mechanism of market in EU does not sufficiently work in both short and long term. On the other hand, disparity of business cycles among between countries emerges. Economies in emerging countries such as Hungary Czech and small and southern countries such as Ireland, Spain etc. enjoyed high growth, but large economies such as France and Germany experienced low growth and high deficits.Therefore, we should discuss evaluation of macroeconomic policies in the Euro area in the current economy. Main them in our study is to investigate the framework for macroeconomic policies of the Euro area For the sake, we also focus on the background and political factors of introduction of the Euro, because political initiatives are needed for construction of economic policy framework.In our study, we firstly investigated political and historical factors of introduction of the Euro, secondly evaluated empirically monetary and fiscal policies by Structural VAR model. Next, we suggested reforms of the policies, particularly, Structural Growth Pact. Our reforms include fiscal transfer in EU level for stability in EU economy. Finally, we had look over future economic policies of EU area.