Monetary Union: Benefits, Costs and a Better Alternative

The European Monetary Union (EMU) died quietly in September when Germany's finance minister, Theo Waigel told a committee of the Bundestag that Germany will insist on all countries following the requirements for public debt and budget deficits set out in the Maastricht treaty. In October, the European Union accepted the German position but continued to plan for the union.

Few observers expected Greece, Portugal or Spain to meet the requirements for entering EMU. Waigel's statement also ruled out Italy, Sweden, Belgium and possibly France. Since a main purpose of monetary union is to bind France and Germany to common policies, a union without France is pointless. The current D-mark bloc would be preferable for all of its current members.