Fixing the Flaws in EMU.

The article explores the success of the Economic and Monetary Union, and its implications to the economic policy and exchange rates of countries adopting the euro currency. It notes the imbalances in wages, prices and market discipline resulting from national policies and institutions, as well as from financial markets and deficient euro area policy coordination. Furthermore, it cites the prerequisites for a functional union in Europe such as strong fiscal discipline, and financial safeguards.