Monetary Integration and Regional Unemployment in the European Union

The European Central Bank will be able to reach its objective of price stability by GDP and inflation forecasts. But price stability will continue to be accompanied by the burden of high and in the case of some disadvantaged regions increasing unemployment which will be the cause of persisting and perhaps widening interregional inequality. This will impose costs from income loss which must be set against the long-term benefits of monetary integration to the disadvantage regions which might accrue by the diffusion of growth and its positive effects on employment. Monetary stability will be more beneficial for the peoples of Europe if it is combined with policies fostering balanced growth with maximum employment. This requires an integrated cohesion strategy encompassing policies for employment and regional development which will induce and accelerate real convergence for all the regions of the countries participating in the European Economic and Monetary Union.