Dear Reader, As we celebrate the first decade of Economic and Monetary Union (EMU) we should remember that the launch of EMU and the euro ten years ago marked a watershed in European integration. It transferred a core element of national sovereignty – monetary and exchange rate policy – to EU level, with far-reaching economic and political ramifications.

For the international monetary system it was the most significant change at least since the end of the Bretton Woods system in the early 1970s. To mark this anniversary, the Commission has produced a report on the first ten years of Economic and Monetary Union that looks at its successes so far and the challenges it faces as it goes forward into its second decade in a changing global context.

One major success of EMU is the distinct improvement in the macroeconomic environment in the euro area as a whole.

Since the start of EMU, inflation has been around 2% a year, significantly lower than the average 3.3% in the 1990s, and far below the levels of the 1970s and 80s when average inflation over the decade stood at 9.3% and 7.5% respectively. And even though countries in the euro area have recently seen significant increases in inflation, the euro has to some degree protected its member economies from the worst effects of global increases in food and energy prices.

At the same time, interest rates have fallen to levels not seen for several decades, while intra-European currency crises have been consigned to history. The EMU policy coordination framework has also helped euro-area governments get their public finances in shape, which is key to ensuring that this stability is maintained over the longer term and that national budgets can cope with the burden of ageing populations.

Employment has been another of the success stories of the euro area’s first decade. Sixteen million new jobs have been created since the launch of the single currency while unemployment has fallen to its lowest rate in more than 15 years. Much of this progress is owed to the reforms undertaken under the Lisbon Strategy for Growth and Jobs, the economic policy surveillance and coordination within EMU, and the wage moderation that has characterised most euro-area countries. Moreover, the euro has certainly supported a closer integration of markets, such as for products and financial services. It has encouraged trade within the euro area and helped make EU firms more competitive. ...

Thank you for your interest in DG ECFIN’s work over the last few years. It only remains for me to say goodbye, and to hope that the next decade will be as rich in achievement for EMU as the last.

Klaus Regling
Director-General,
Economic and Financial Affairs DG

Download European Economy News, June 2008

PDF format, 1.6MB, 20Pages.

European Economy News is published by the External Communication Unit of the European Commission’s Directorate-General for Economic and Financial Affairs.

Editor-in-chief: Marco Buti. Coordinator: Sophie Bland. Published Quarterly, European

Table of Contents:

WHAT’S NEW 4
A round-up of news and events in European economics

EMU10
The Brussels Economic Forum: EMU ten years on 7-13
“Every reason to be proud” 7
EMU10: looking forward to the next decade 8
The euro in the world 10
Realising the full potential of EMU 12

EURO AREA PROFILE
The economy of the euro area 14
The euro area is quite unique in the world because it is an economy with one monetary policy and many fiscal policies which are subject to coordination. This article looks at the unity, diversity and divergences in the euro-area economy

NEWS IN DEPTH
Slovakia’s date with the euro 16
Slovakia has convincingly passed the first of the EU’s tests for euro entry. Armed with the Commission’s recommendation, it is well on the way to introducing the single currency on 1 January 2009

LOOKING AHEAD 18
DG ECFIN’s agenda, and events for your diary
RECENT RESEARCH
AND ANALYSIS BY DG ECFIN 20

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Economic and Monetary Union: 10 years on
Organised by DG ECFIN, the annual Brussels Economic Forum (BEF) brings together EU leaders, economists and many other stakeholders to discuss major issues in European economics and economies. This year’s BEF, held on 15-16 May, took the first ten years of Economic and Monetary Union as its subject, and the recent DG ECFIN ‘EMU @10 report’ provided the background context.

The economy of the euro area
The euro area has proved over the past ten years to have been a successful and increasingly integrated economy. Today, in many respects, the euro area can be viewed as a single economic entity comparable to other very large economies.

Slovakia’s date with the euro
Slovakia has convincingly passed the first of the EU’s tests for euro entry. Armed with the Commission’s recommendation, it is well on the way to introducing the single currency, as expected, on 1 January 2009.

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