Abstract
Presently, the possible effects of European Monetary Union (EMU) on employment are being discussed widely in public. Many politicians emphasize again and again that EMU will “automatically” bring about significantly positive employment effects. The purpose of it is mainly to gain the assent of the majority of voters to EMU1 which is still missing in Germany as well as in some other member states of the EU. The reasons—if any—given for this assertion are the well known benefits of monetary union: elimination of the exchange rate risk, cessation of transaction costs, more efficient allocation and lower real interest rates on larger financial markets etc.2 In addition, a postponement of the start of EMU is rejected by many politicians in Germany on the ground that the Deutsche Mark would then revalue and unit labour costs as well as the unemployment rate would increase.
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