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on the Political Economy of the E.M.U.
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It has been more than a decade since the introduction of the EURO in the international monetary system. Since then, it has gained monetary credibility and today it is treated, internationally, as the second most widely accepted currency following the US dollar. Today, the EU comprises a state-like entity of 27 member states, with a combined population of over 500 ml inhabitants (7,3% of world population), generating a nominal GDP of 17,6 trl US$ (20% of global GDP in PPP terms). At the same time, the EU's core (Eurozone) comprises a monetary and economic union of 17 member states with more than 330 ml people using the EURO as their common currency. The scale and gravity of the Common Currency's project is unprecedented, thus entailing significant economic, political and societal implications not only for Europe but also for the rest of the world in terms of global economic and financial stability.
Today, the EU faces a multifaceted crisis, from which it is called to emerge stronger. Once again the EU is called to learn from its shortcomings and make the necessary adjustments for adapting to its new environment. Once again, the EU can prove that any single challenge it faces in fact represents a chance for moving forward in a more robust, decisive and effective fashion championing the idea of cooperation.
United in diversity is the EU’s motto and this core value has transformed it from an international organization of the late 1950’s to a state-like entity in 2012. Putting this belief in practice is what is expected from all its member states, nothing less.
The introduction of the EURO in 2002 constitutes the crowning achievement of a prolonged effort that was formally launched in 1992 but draws its origins and motives from the very first day of EU’s existence, that of political and economic integration of European nations.
Over those fifty years of existence the EU has managed to become a global power in world trade. At the same time it serves as a beacon of socioeconomic and political security and stability both for those countries that engulfs and for those near abroad. The EURO incarnates both facets of EU’s presence in the international arena; the soft security role that the EU serves in Europe and its unprecedented economic development that has transformed her to a fundamental player of global economy.
However, recent international financial crisis highlighted the cracks that exist in the EU's foundations. The crisis served as a magnifying lens on Europe’s inadequacies and disagreements both in structure and in economic governance issues. The ever lasting and perennial tug of war between EU’s supranational nature and the nation-state came to the foreground once again. Still, what blew up with even more noise in the International Economic arena was how much farfetched was the establishment of the EURO, being more of a political choice than an economic one. Structural weaknesses in terms of crisis management, insufficient level of real economic convergence and absence of financial bail-out instruments underlined the fact that the single currency was an international economic giant with feet of clay.
Central concern of this Jean Monnet Multilateral Research Project is to explore the EMU's multilevel effects and prospects spanning from the elite decision-making centres to the rest of the societal structures; the EMU constitutes a process that is hardly reversible but which, at the same time, demands bold political will to back it up for rendering it economically effective, functional and benign for its end users.