The European Monetary Union

Paper Summary:

This paper explains that the future of the the European Monetary Union (EMU) is questionable because the leaders of the EMU and the world have some grave doubts as to its future; however, there is a never-ending stream of applications of new nations, mostly from Eastern Europe, wishing to join. The author points out that the problems revolve around the issues of (1) determining the size of the role of the welfare state; (2) the conflict about monetary policies, led by the United Kingdom and (3) corruption within member nations. The paper suggest that the resolution of the welfare issues through such mechanisms as a community's insurance is unlikely given (1) the cost, (2) the risk factors, (3) the macro-economic factors and (4) the failure of some of the countries already within the EMU to resolve their own individual country's welfare issues.

Table of Contents
Introduction and the State of Knowledge
Empirical Findings
Conclusions

From the Paper:

"Developments towards more segmented welfare states or dual welfare states are likely, although national governments may still maintain regulatory and taxation tools to control the growth of market based and other non-governmental welfare provisions in such a way that universal access to quality welfare provision and relatively equal distributions of income and welfare is possible. This will remain domestic policy issues and choices for which national governments to a large extent can be held politically accountable. But the social and political bases for state organized solidarity. Likewise, new forms of solidarity may develop on a trans-national or trans-regional basis where state boundaries will to a lesser extent than before constrain or limit such solidarity from developing."

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