21. Economic and Monetary Union

This chapter examines the Economic and Monetary Union (EMU), focusing on its key components and what happens when countries join. EMU has been an integral part of European integration since the early 1970s. Member states agreed that there should be economic and monetary convergence prior to launching EMU. However, there are some member states (such as the UK) that did not want to join EMU. The chapter first explains what economic and monetary policy is before discussing various theoretical explanations, both economic and political, accounting for why EMU was created. It also considers some criticisms of EMU and how EMU has fared under the global financial crisis and the sovereign debt crisis. It concludes by reflecting on what the future of the European Union will be with EMU in place.