Abstract
EMU's design is seriously flawed. Monetary union was established without political union, creating a single eurozone economy that cannot be governed with the combination of macroeconomic policy instruments that modern national governments have. Its exceptionally independent central bank, the ECB, sets monetary policy for the eurozone economy as a whole, but it has no institutions for setting a eurozone-wide fiscal policy, and hence no democratically accountable structure for setting a eurozone-wide monetary-fiscal policy mix capable of combining growth and employment with price stability. EMU thus lacks democratic legitimacy as well as the capacity to govern the eurozone economy effectively.
Published Version
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