Nature and Objectives of Economic and Monetary Union

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I. Nature and objectives of economic and monetary union

Economic and Monetary Union (EMU) is an advanced stage of economic integration, which is characterized by the implementation of a common currency and economic policy at EU level and logical complements the creation of the single market. Can be defined six stages of economic integration:

1. Preferential Trade Area (with reduced customs tariffs between certain countries) 2. Free Trade Area (no internal tariffs on some or all goods between the participating countries) 3. Customs Union (with the same tariffs to third parties and the common commercial policy) 4. Common Market (general rules for the products and the free movement of goods, capital, people and services) 5. Economic and monetary union (a single market with a common currency and a common monetary policy) 6. Complete economic integration (all mentioned above plus harmonized fiscal and other economic policies) The degree of economic integration in the European Union (EU) is different. All EU member states are part of EMU and form a common market, known as the Single Market. All coordinate their economic policies in line with the EMU. Adopting the euro but is an obligation laid down in the Treaty establishing the European Community. Some Member States are more advanced in the process of integration and the single currency - the euro. They form the Eurozone have a single currency and a single monetary policy by the European Central Bank. Member States which are not part of the eurozone retain their own currencies and conduct their own monetary policies. Therefore, the degree of economic integration and monetary union is a combination between stages 4 and 5 given above list. To achieve full economic integration would require all Member States to join the Eurozone, to harmonize their fiscal policies (including taxation), and all other economic policies. The main objectives are to EMU coordination of economic policies of the Member States and the...
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