The Eurosystem

What is the EMU?

The Economic and Monetary Union (EMU) is an area that shares the same market, the same currency and a single monetary policy.

Its creation has involved:

• For domestic economic policies:
  1. The loss of the exchange rate as an adjustment mechanism to combat possible declines in competitiveness.
  2. The impossibility of changing domestic interest rates.
• For the various markets:
  1. The reduction of transaction costs.
  2. A decrease in the uncertainties related to monetary, exchange rate and financial conditions.
  3. The tendency towards the integration of both financial and goods markets.