Abstract
The European monetary union (EMU) is a largely incom
-
plete currency union. The Euro founding fathers were
very aware of this issue but, because of political con
-
straints, they chose a “minimalistic” solution (Constan
-
cio 2018). The optimistic view of the time was that even
an incomplete currency union would be enough to
induce greater political and economic convergence
among member countries, making it easier to adopt
further reforms of the EMU architecture when, and only
if, needed. Thus a common currency and a fiscal brake,
in the form of the Stability and Growth Pact (SGP), rep
-
resented the only two blocks of the original EMU. There
was no perception that, in order to support the cur
-
rency union, a common financial supervision for banks
and a crisis management mechanism for member
countries might also be needed.
Original language | English |
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Pages (from-to) | 32-37 |
Number of pages | 6 |
Journal | IFO DICE REPORT |
Volume | 2018 |
Publication status | Published - 2018 |
Keywords
- euro
- policy