Economic and monetary union
- The need for EMU
- The single monetary policy of the EU
- The common economic policy of the EU
- Appraisal and outlook of the EMU
- Bibliography on the EMU
Economic and monetary union (EMU) is an advanced stage of multinational integration involving a common monetary policy and closely coordinated economic policies of the member states. EMU has to be based on a common market in goods and services but is itself necessary for the proper functioning of the common market, as exchange rate variations between Member States' currencies hinder trade and investments.
In the early 1970s, the original six members of the European Economic Community tried already to establish an EMU and failed. The reasons were both external - the collapse of the international monetary system - and internal - the non-completion of the stage of the common market. This failure served, however, as a learning experience. The Member States of the European Community understood that they could not rush the multinational integration process, that they should complete the common market stage, adopt many accompanying common policies and commit themselves by treaty to the goal of EMU. The economic and monetary union initiated by the Maastricht Treaty and completed for most Member States with the circulation of the euro is an evidence of the continuity of the multinational integration process [see section 1.1.2].