Some Economic Benefits of Monetary Union

Abstract

The essential characteristic of the monetary union prescribed in the Maastricht Treaty is that monetary policy in the EU will be run by a new European central bank (ECB), at the hub of a European system of national central banks. This new bank will be modelled on the German central bank, the Bundesbank, in the sense that it will carry out its monetary role in complete independence from political interference from the political authorities; and that, like the Bundesbank, its overriding responsibility will be to ensure price stability.