Chapter

EMU: A Unifying Factor

Loukas Tsoukalis

in What Kind of Europe?

Published in print March 2005 | ISBN: 9780199279487
Published online October 2005 | e-ISBN: 9780191602979 | DOI: http://dx.doi.org/10.1093/0199279489.003.0006
 EMU: A Unifying Factor

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This chapter presents a brief history of the economic and monetary union (EMU) in Europe, and examines its implications for the future of European integration. It argues that the EMU is a high-risk strategy, given the combination of fixed exchange rates and ‘one-size-fits-all’ monetary policy with very weak adjustment mechanisms and economic divergence. If managed badly, the EMU would have a negative effect on output and employment for the EU as a whole. The success of the EMU rests on a stronger and more integrated EU in both political and economic terms, as well as major structural reforms.

Keywords: Europe; integration; economic policy; EU; economic and monetary union

Chapter.  10199 words.  Illustrated.

Subjects: European Union

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