European Monetary Union. Convergences and Divergences in an Optimum Currency Area

Abstract

Theory stated that a country should adhere to a monetary area if that country has about the same development level as member states. Otherwise, less developed countries will bear more pronouncedly the effects of asymmetric shocks that may occur in an integration zone. The reality exceeded far and away what the famous economist proved, the case of Greece being the example that put us forward how well we must be prepared for joining the EMU, the European Union itself roughening the financial rules for potential candidates. This paper aims to carry out an analysis of divergences and convergences in the Monetary European Union based on research on the various theories available in the literature and on the current situations of EMU members and non-member countries.