Europe s monetary union has worked remarkably well.

EMU was designed to encourage structural reforms.

We spoke about European Monetary Union, but we didn t have it.

The EU s Economic and Monetary Union was a means to an end, not an end in itself.

Ending the monetary union would end the European project itself, and wreak unmanageable havoc.

That default will be due in large part to its membership in the European Monetary Union.

Other ideas, like moving to fiscal union, would require a fundamental revision of the EU s founding treaties.

It is not that the end of European Monetary Union is on the agenda it is merely that people have begun thinking about possible low probability futures in which the end of EMU might be placed on the agenda.

Given that financial integration is particularly strong within the monetary union, putting the ECB in charge was an obvious choice.

Europe learned the same lesson with the move to monetary union and the creation of the European Central Bank to manage its new currency, the euro.

Everybody accepted if grudgingly that the bare bones EMU was the only game in town.

Quite simply, the risks for small peripheral countries are inherent in the system created by the European Monetary Union.

Stability and Prosperity in Monetary Union

Until the late 1990 s and the advent of monetary union, most government debt in the European Union was domestically held in 1998, foreigners held only one fifth of sovereign debt.

Historically, monetary union was regarded as the route to political union.

The country qualified for the Economic and Monetary Union of the European Union (EMU) in 1998 and joined with 10 other European countries in launching the euro on 1 January 1999.

But the European Council also created a Task Force under President Herman Van Rompuy to elaborate concrete proposals for reforming the monetary union.

The price of the monetary union s survival, and thus that of the European project, is more community a banking union, fiscal union, and political union.

So, does Germany want to hold together the monetary union and thus preserve the EU, or will it allow dithering and a lack of vision to hasten the erosion of Europe s foundations?

In the early 1990 s, when the plans for the European Monetary Union (EMU) were drawn up, Germany insisted on a Stability Pact as a price for giving up the Deutschmark.

But, as is acknowledged in the ECB s statute, it also means ensuring the smooth operation of payment systems.

The real crisis of the EU and the monetary union is not financial but political or, more precisely, it is a leadership crisis.

And we will need to bridge the gap between eurozone members and EU members that remain outside the monetary union, some of which may want to participate in the new supervisory mechanisms.

The difference, it was argued, was monetary union.

But this insight is not reflected in monetary union s design.

The crisis had moved from the monetary union s periphery to its core.

PRINCETON In constructing Europe s monetary union, political leaders did not think through all of the implications, which led to major design flaws.

The European Union s commitment to monetary union enabled the eurozone s Mediterranean countries to improve their debt dynamics and public finances dramatically.

The European Central Bank will serve as the eurozone s center of power even more than it does today, because it is the monetary union s only institution that can actually act.

Up to the late 1990 s and the advent of monetary union, most European Union sovereign debt was domestically held in 1998, the overall ratio of foreign held debt was only one fifth.

The European Central Bank s announcement of its outright market transactions program has reduced the risk of a sovereign debt crisis in the eurozone periphery and a breakup of the monetary union.

They are, as listed in Article 13 of the Treaty on European Union the European Parliament, the European Council, the Council of the European Union, the European Commission, the Court of Justice of the European Union, the European Central Bank and the Court of Auditors.

Some argue that the only way to save the euro is for monetary union to be followed by fiscal union.

Although there are technical and legal reasons why such a split would be harder for an EMU country, there seems little doubt that a country could withdraw if it really wanted to.

European Union

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European Community

Some of these warnings were inspired by deep seated doubts about European monetary unification.

Everyone understood that a monetary union would require enforceable fiscal and banking rules.

The institutions of the European Union are the seven principal decision making bodies of the European Union.

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European Union

Statement of the EU

Department of Economic and Social Affairs www.un.org esa