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