A Monetary Union in Motion: The European Experience

24 Pages Posted: 7 Sep 2001

See all articles by Richard Portes

Richard Portes

London Business School - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: September 2001

Abstract

This Paper begins with a discussion of the relation between economics and politics in the construction of EMU. It briefly considers how the structural characteristics of the European economies relate to the Single Market programme, and how this initiative of the late 1980s both built the foundations for and led the way to EMU. It then considers in more detail the justification for monetary union and the process by which it was achieved. The analysis turns to instabilities that arise from the 'domino effect' in regional integration and how those relate to EMU. A discussion of the problems of fiscal consolidation in a monetary union and the 'Stability Pact' then leads to an enumeration of a range of problems that still face EMU. We conclude that both the integration of the real economy embodied in the Single Market programme and the political commitment - however imperfect and limited - of the European Union are necessary conditions for the success of monetary union.

Keywords: Single currency, economic integration, EMU, monetary union

JEL Classification: F15, F33, F36

Suggested Citation

Portes, Richard, A Monetary Union in Motion: The European Experience (September 2001). Available at SSRN: https://ssrn.com/abstract=282726

Richard Portes (Contact Author)

London Business School - Department of Economics ( email )

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HOME PAGE: http://faculty.london.edu/rportes/

Centre for Economic Policy Research (CEPR)

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United Kingdom

National Bureau of Economic Research (NBER)

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