Completing the Unfinished House: Towards a Genuine Economic and Monetary Union?

• Published date: 01 December 2015
• Author: Otmar Issing
• DOI: http://doi.org/10.1111/infi.12076
• Date: 01 December 2015

COMMENTARY

Completing the Unfinished

House: Towards a Genuine

Economic and Monetary Union?

Otmar Issing

President, Center for Financial Studies; First Chief Economist, European

Central Bank.

I. EMU, a Unique Experiment

The European Monetary Union (E MU) represents an unprecedented inst itutional

arrangement. Never before in his tory have states, while mai ntaining their in dividual

sovereignties, voluntar ily renounced the ir national currencies in favour of a new

common currency and ceded their authority over monetar y policy to a suprana-

tional central bank. It can therefore be said that on 1 January 1999, when this new

currency –the euro –was adopted, a bold expe riment began, the outcome of which

is still under debate 16 years late r.

This experiment has three dimensions –political , economic an d monetar y

integration –which form the legs of a new and dif ficult ‘triangle’(Issing 2004).

While the establish ment of the European Central Ba nk (ECB) solved the mone tary

International Finance 18:3, 2015: pp. 361–372

DOI: 10.1111/infi.12076

© 2015 John Wiley & Sons Ltd