ABSTRACT
The Economic and Monetary Union is the outcome of attempts to replace the post-war monetary system agreed at Bretton Woods with an alternative on European terms. The economic union is based on the four freedoms of movement for goods and services, people and capital; the monetary union is based on a single currency issued by the European Central Bank (ECB). It is ultimately a political project of pooling sovereignty among small open economies which hoped to gain collectively more autonomy for policymaking. Yet, the case for market integration with and through currency unification was always carefully scripted as an economically rational undertaking. After the euro area (EA) crisis in 2010–2012, this seems doubtful as far as the common currency is concerned. Hence, this entry focuses on the single currency and touches on freedoms of movement only insofar they were seen as relevant for the functioning of the euro. The historical background is outlined first, then the evolving policy architecture and, finally, the debates surrounding the incomplete monetary union.
