Money for the People: Economic and Monetary Union

  • Peter Cullen


Perhaps the most supranational initiative within Europe has been the move towards monetary union, as Bradley argued in Chapter 3. To clarify these issues, the theory of monetary union will be explored in this chapter and the policy responses of Britain and Italy will be compared. Full economic and monetary union (EMU) requires two or more regions or states to adopt common macroeconomic policies and a universally acceptable currency. Within most states of the EU, the euro is that currency. Although various institutions are developing economic responsibilities and competencies, they appear to be insufficiently powerful and wide-ranging to perform the functions demanded for true EMU. The economic arguments for and against monetary union in Europe rest on one very simple proposition. Under what circumstances is it advantageous for a particular geographical area to have one currency? Unfortunately, while the question is simple, the answer is complex.


Exchange Rate Interest Rate Foreign Direct Investment Monetary Policy House Price 
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© Palgrave Publishers Ltd 2002

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  • Peter Cullen

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