The euro, the enlarged EU and Asia

Abstract

On January 1st 2002, euro coins and notes were introduced in the twelve countries of the European Union. The successful introduction of the euro was the last stage of a long process, officially called the Economic and Monetary Union (emu). And this process cannot be understood correctly without placing it in the context of the even longer process of European Integration. This paper explains what the euro is. It looks back briefly at the post-war history of monetary integration in Europe. Then we focus on the emu and explain why and how the euro was successfully introduced. We discuss whether the eurozone is an Optimum Currency Area, whether and how that matters, and the costs and benefits of the euro. Finally, we touch upon the prospects of the new EU members adopting the euro, then discuss the implications of emu in particular and European Integration in general, for Asia.