Andy Rose (2000), followed by many others, has used the gravity model of bilateral trade on a large data set to estimate the trade effects of monetary unions among small countries. The finding has been large estimates: Trade among members seems to double or triple, that is, to increase by...

By opening markets the European union has been also an economic success. However, with respect to political organization the European Union is far less accomplished. The misguided concept of a successful Europe consists in mistaking integration for harmonization and homogenization. But the...