This volume contains the proceedings of a conference on "Macroeconomic Policy and the External Constraint" held by the Centre for Economic Policy Research and the Bank of Greece in Athens in May 1990. The papers consider the implications of the external constraint for the design of stabilization policies in the European economies under the fixed exchange-rate regime of the EMS and in the aftermath of the abolition of intra-EC capital flows. The volume includes cross-country studies of savings and investment, fiscal policy, unemployment, incomes policies, and business cycle fluctuations, and also a historical study of the macroeconomic policies pursued by European governments in the 1930s. The volume also contains a study of the effects of the exchange-rate constraint on France and Germany, and a series of country studies of the effects of the external constraint on macroeconomic policy in Denmark, Spain, Greece, the Netherlands and the UK. The volume concludes with a panel discussion on "The Impact of Monetary Union on Macroeconomic Policy in Europe."