In this paper we discuss the emergence of the new European macroeconomic structure within EMU. We focus on three important elements: the wage-fixing authorities in each country, the fiscal authorities in each country, and the single European Central Bank (ECB). We identify serious problems which might arise in coordinating both the wage-setters and the fiscal authorities, and argue that these problems could be exacerbated if the ECB conducts monetary policy inappropriately. In the light of th...