The Economic and Monetary Union (EMU) is a single currency area within the European Union in which people, goods, services and capital move without restriction (Europa Quest (1), 2001). Imperative to the success of the EMU is the implementation of a single European currency, the Euro, and the application of specific macro-economic policies by the EMU member states (Harris, 1999: 78). Moreover, it is the foreseeable intent of European governments to create a framework for stability, peace and prosperity through the promotion of structural change and regional development (JP Morgan, 2001). This essay will endeavor to highlight the fundamental gains likely to be accrued by the European business community as a result of EMU policy provisions. The developments and circumstances preceding the EMU formation will be examined to give insight into the functioning of a monetary union. Furthermore, it is essential to analyze the implications the EMU has for firms within both ‘Euroland’ and other European nations.To establish a strong understanding of the intricacies of the EMU, it is essential to discuss both the antecedents and major developments in this monetary union. The origins of the EMU can be traced to the formation of the European Coal and Steel community (ECSC) in the early 1950s, which was the first attempt to harness European economic unity to achieve greater international competitiveness (Per Jacobson, 1999) (Duisenberg, 1998). The success of this venture prompted the foreign ministers of six ECSC nations to examine the possibility of further economic integration (Chulalongkorn University, 1999). Hence, in 1957 one the most significant agreements in European economics history, The Treaty of Rome, was signed. The Treaty of Rome’s fundamental goal was to provide for the creation of a common market (Kenwood & Lougheed, 1999:280). The most significant aspect of this treaty was the commitment made by such countries as B...
