Political and economic consequences of Economic and Monetary Union: taking stock of the first eight years

摘要: With the creation of Economic and Monetary Union (EMU) in the European Union (EU), now eight years ago, we can all start to look back and reflect on the time that has passed and the challenges and opportunities that lie ahead. Created on 1 January 1999 with banknotes and coins introduced into the marketplace on 1 January 2002 EMU has by many been heralded as an unprecedented success of economic and monetary integration.Many have focused on the sheer size of the project: twelve European Union member states introduced banknotes and coins in 2002 as legal tender replacing their previous national currencies, many of which had been around for centuries. As of 1 January 2007 Slovenia is the newest country to join. Another remarkable feat was the fact that a new European Central Bank (ECB) was created to formulate a single monetary policy for the eurozone. At the same time EMU leaves responsibility for budgetary and fiscal policies to national governments who still decide the level of expenditure and of taxes for its own subjects. Reflecting on these shared roles one can easily see that EMU did not introduce a fully-fletched federal regime in the area of economic and monetary integration. Rather it centralized only monetary policy leaving much of the responsibility over economic policy lie with member states.