European Economic and Monetary Union is currently in the course of preparation by an inter-governmental conference. What are the benefits and risks associated with European monetary union? What essential requirements need to be fulfilled when the agreements are concluded?

Leaving foreign exchange markets to themselves may not lead to realistic and stable exchange rates. Thus appropriate criteria for interference must be defined. The OPTICA (Optimal Currency Area) Group which was appointed by the European Commission tried to work out appropriate rules for the EC....