Political and Economic Dilemmas of the EMU

Abstract

Numerous political and economic dilemmas have confronted the European Economic and Monetary Union (EMU) since 1989, when it was resurrected by the Delors Report. Some of these dilemmas have eventually faded away as, for example, the ratification difficulties of the Maastricht Treaty (the Treaty on the European Union), while others continue such as the political challenges facing the Maastricht Treaty, the impact of the Exchange Rate Mechanism (ERM) crises, as well as the implications of the admission of new members. Still other problems loom on the horizon as, for example, the institutional and decision-making reforms needed to provide for the efficient functioning of the EMU, the implications of a multi-speed EMU and the effects of the opt-out and of the non-EMU member nations on monetary integration. These past and continuing dilemmas are the subject of this chapter.