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A Monetary Union in Motion: the European Experience

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  • Portes, Richard

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.

Suggested Citation

  • Portes, Richard, 2001. "A Monetary Union in Motion: the European Experience," CEPR Discussion Papers 2954, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2954
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    References listed on IDEAS

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    1. Engel, Charles & Rogers, John H, 1996. "How Wide Is the Border?," American Economic Review, American Economic Association, vol. 86(5), pages 1112-1125, December.
    2. Kenen,Peter B., 1995. "Economic and Monetary Union in Europe," Cambridge Books, Cambridge University Press, number 9780521558839, October.
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    6. Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 15(30), pages 08-45.
    7. Richard Baldwin, 1993. "A Domino Theory of Regionalism," NBER Working Papers 4465, National Bureau of Economic Research, Inc.
    8. Richard Portes, 1993. "EMS and EMU After the Fall," The World Economy, Wiley Blackwell, vol. 16(1), pages 1-15, January.
    9. Baldwin,Richard & Haapararanta,Pertti & Kiander,Jaakko (ed.), 1995. "Expanding Membership of the European Union," Cambridge Books, Cambridge University Press, number 9780521481342, October.
    10. Winters, L. Alan, 1996. "Regionalism versus multilateralism," Policy Research Working Paper Series 1687, The World Bank.
    11. Martin Feldstein, 1997. "The Political Economy of the European Economic and Monetary Union: Political Sources of an Economic Liability," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 23-42, Fall.
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    Cited by:

    1. Jochen Michaelis & Michael Pflüger, 2002. "Euroland: Besser als befürchtet, aber schlechter als erhofft?," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 71(3), pages 296-311.

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    More about this item

    Keywords

    Single currency; Economic integration; Emu; Monetary union;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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