The European Monetary Union in a public choice perspective

Book abstract:

Economic and Monetary Union (EMU) is persistently offered as a unifying concept for closer union within the European Union. This work challenges that concept and examines European EMU from the perspective of public choice - that is, whether it is consistent with the interests of the participating institutions.

The author analyses those institutions and assesses whether or not they have the mechanisms to deal with the economic shocks and contradictions arising from diverging national interests. Chapter one, the introduction, provides a comprehensive guide as to how the work is organised. The background of Western European efforts towards economic and political union since the early nineteenth century is given in chapter two. The post-war period and the pursuit of peace and prosperity through political co-operation is the subject of chapter three. The criteria for defining an optimum currency area are examined in chapter four. The challenge to EMU comes in chapter five; comparison with the US and Canadian currency shows that the EU does not have the available adjustment mechanisms to respond sufficiently to economic disturbances. Centralisation and surrender of monetary and exchange rate policy to the ECB and the lack of sufficiently robust fiscal authority are the contradictions explored in chapter six. The history, the plot and the scene are set and in chapter seven an examination of the players and their differing roles in the commercial marketplace is given. The interplay between the Council of Ministers, the European Commission and the European Parliament is explored in chapter eight. What economic shocks threaten EMU and the extent to which these might operate asymmetrically in the EU are covered in chapter nine. The impact of those shocks on national and EU institutions and the political responses are examined in chapter ten. The concluding chapter eleven provides a review and summary of the work, a discussion of the unresolved issues, an indication of future research directions and the outlook for the future of the Euro.

The work will interest students, scholars and policy makers in the fields of European economics, macroeconomics and Public Choice.

Jennifer C. Martin-Das is a Research Analyst at the Institute for Women's Leadership at Rutgers, the State University of New Jersey, USA.