Ten Years of EMU – Achievements, Drawbacks and Challenges
The assessment of ten years of EMU remains ambivalent. On the one hand the euro has contributed to price stabilisation and established itself as the world's second reserve currency besides the dollar. Its introduction has also benefited intra euro area trade. On the other hand the expected growth bonus has not yet materialised. Economic growth has been more restrained in the euro area than in countries that are not part of the euro currency area. Despite the complicated and asymmetrical economic policy design of the EMU the institutions have cooperated well and swiftly during the international financial crisis and have tried to cushion the damage to the financial sector and economic growth by coordinating their efforts. For some countries outside the euro area the common currency has gained attractiveness during the crisis. Nevertheless the EMU is facing major challenges. On the one hand the euro area is to be enlarged to include a maximum of the 27 EU countries. On the other hand the significant divergence of the euro area countries' competitiveness raises doubts about the cohesion of the EMU. To improve the effectiveness of a common monetary policy further progress towards a common European business cycle is essential.
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