Risk factors in the establishment and running of EMU

Taking a historic view of the preparations for monetary union remains important even after the birth of EMU, because reform of the political outlook of monetary integration created risk factors over the preparatory period that would necessarily persist into the early years of its operation. These risk factors are of two kinds. (i) Reunified Germany will have to find its place and interests within EMU, since it has not actually had time to consolidate its national economy after integrating economically and financially with the five East German provinces. Indeed the coincidence with the process of preparing for and introducing EMU may have impeded the reunification process. (ii) The Community has no clear concept of the further integration and harmonization tasks that the introduction of monetary union requires in the rest of economic policy and politics as a whole. Monetary union can be seen as a last stage in creating a uniform single market. However, it can also be seen not as the end-product, but as a commencement from the macroeconomic point of view. Raising monetary policy to a supranational level cannot leave intact fiscal policy or the whole political sphere in general.