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1978 will probably turn out to be one of the most momentous years in the post‐war history of international monetary affairs. It was the year in which the leaders of the European Economic Community (EEC) made the first positive steps towards the establishment of a European Monetary System (EMS). It was also the year in which members of the International Monetary Fund (IMF) adopted the Second Amendment to the Fund's Articles of Agreement.

In late July 1993, the European Monetary System threatened to unravel. The Exchange Rate Mechanism (ERM), which ties European Community members′ currencies together, faced the possibility of collapse as the French franc and other currencies pushed perilously close to the permissible bounds of fluctuation despite massive intervention by central banks. Similar conditions had forced the British pound sterling and Italian lira out of the ERM in September 1992. The short‐term resolution of the crisis was the decision to widen the permissible bounds of fluctuation. Examines the events leading to the ERM crisis, and the implications of the crisis and its resolution on the future of European economic integration are also examined. Finally, discusses the likely future of European economic and monetary union given the current economic and political climate of member countries.

Reviews the attempts to introduce greater exchange rate stability into the European Union, culminating in the 1992 crisis in the Exchange Rate Mechanism, and the UK’s withdrawal. Outlines the Maastricht Treaty proposals for monetary union by 1999. Finally, reviews the arguments for and against UK adoption of the single currency, drawing, where possible, on the limited empirical evidence.

The European Union (EU, formerly the European Community) celebrated, in November 1993, the ratification of the Maastrict Treaty pushing European union another step closer to realization. In the face of growing external forces (the disequilibrium caused by the disintegration of Eastern Europe and the former Soviet Union, the war in Bosnia and global economic recession) that affect the planned progress and strategy the European Union (EU) leaders pursue, the authors of this article use a strategic management framework to analyze the EU. To our knowledge, this has not been attempted before. There is a growing volume of literature on the adaptation of the strategic management model to public sector institutions (Rainey, Backoff & Levine, 1976; Eadie & Steinbacher, 1985; Bryson & Williams, 1983; Nutt & Backoff, 1993). Public enterprises sometimes pursue objectives different from those of private — and third‐sector (non‐profit) enterprises (Jauch & Glueck, 1988). Public managers must be able to deal with more complex internal and external environments than private — and third sector managers. Despite these and other difficulties, a strategic analysis provides clues for effective strategic management in the public sector (Eadie & Steinbacher, 1985; Ring & Perry, 1985; Nutt & Backoff, 1993). A strategic management model is used here to provide a framework of analysis and direction on which critical areas of concern need to be addressed for the EU to continue with their creation of a community wholly open to the free and unimpeded circulation of people, services, capital and goods (Wechsler; Hahn, 1991).

Examines the implications of European Monetary Union (EMU) for property managers of operational and investment property portfolios. In the first section, the background to the introduction of a single currency is reviewed and the proposed timetable and method of introducing the Euro is discussed. The next section analyses the property management areas which may be affected by EMU. It is argued that the costs and benefits of the introduction of the Euro will be unequally distributed. Key factors will include the pattern of property interests and liabilities in potential member countries. A key variable will be the rate at which the existing currency is converted to the Euro. This will be a determinant of the future value of assets and liabilities and will, therefore, impact on corporate costs, profitability and competitiveness. The degree to which a firm benefits from the elimination of exchange rate uncertainty and transaction costs will depend on its financial structure. Firms which meet liabilities in non‐sterling currencies from revenues raised in such currencies will not benefit to a great extent. The paper argues that the legal implications for continuity of contract will be minimal for property managers. It is suggested that the need to amend information systems and records will be the major cost to many organisations.

In this chapter, the historical and theoretical evolution of the policy framework in Europe is presented. It begins from the early steps guided by the general principles of the Keynesian theory in open economies, goes through its revision after the 1970s and the fall of the Bretton Woods agreements, the creation of the European monetary system, and ends with a presentation of the theoretical underpinning that brought to the model on which the European monetary union was built on. The evolution of the economic theory is pieced together, in the light of the main historical and political facts that occurred. A first insight about the flaws of the Eurozone policy framework is provided.

This study aims to research the effects of unemployment wages current account and consumer price index (CPI) on the real gross domestic product (RGDP), which, in the optimum currency area (OCA) theory, supposes that countries with higher factor mobility can significantly profit from the currency area. However, in this study, it is shown that the considered optimum currency crisis (OCC) model is affected by mobility factors, as the defined theory has not been perfectly realised in the Eurozone.

In this study, Breusch–Pagan–Godfrey and Lagrange multiplier (LM) tests are used for supporting the survey for better estimation of the panel cointegration tests, where Pedroni's (1995, 1997) technique is used. The unit root tests are employed, of which the Phillip–Perron and augmented Dickey–Fuller tests (unit root test, Dickey, D. and W. Fuller, 1979) are considered.

It can be concluded that demand shocks will tend to be more asymmetric instead of being symmetric, even though they are in the customs union (CU). However, Polish workers in a given scenario may move to Germany, but because of the rigidity of the labour market and qualification differences between workers, the interregional integration of member countries is reduced, and this reduces the absorption of asymmetric shocks. In Germany, where strong employment protection and rigidity are observed in comparison to Poland, although there has been historical migration and economical collaboration, unfortunately, the integration of the two countries’ economies has not been realised.

Quantitative research on fiscal union and the estimation of its effects is not possible because there is no practical experience of fiscal union throughout the European Union (EU). However, quantitative research is used for estimating the effects of OCA in the Eurozone. Quantitative investigation is particularly focused on the monetary union and single currency and its impact on growth rate. In this study, the ordinary least squares (OLS) method and panel cointegration test are employed for estimating the effects of the considered variables.

The Eurozone and the application of a single currency throughout the EU was a considerably difficult task. In addition, the adoption of a single currency was not easy for those member countries that fulfilled the “convergence criteria” (or “Maastricht criteria”) and who joined the Eurozone, because only adoption is not enough; maintenance of those criteria is also required. This study analysed the application of the Eurozone in the light of the OCA of Mundel's theory.

The OCA is important for member countries’ economic relations. However, the application of a single currency is not easy and needs to be controlled and regulated to ensure best practises throughout the Eurozone. Monetary integration is not a simple process, and Eurozone countries’ financial difficulties affect each other’s markets’ indifferent aspects. Particularly in any market recession, demand shocks tend to have different effects. Furthermore, in comparison to the monetary union, the CU has a considerable impact on trade enlargement.

In this study, the effects of the independent variables “wages, unemployment, CPI and capital flow” on the dependent variable “RGDP” is considered, which, in the OCA theory, supposes that countries with higher factor mobility can significantly profit from the currency area. In application, it was turned into crisis because of inadequate monetary and fiscal application. In this paper OCA is questioned in the light of the Eurozone for bringing better understanding to these difficulties. The considered model and estimations are used for evaluating to create sustainable monetary integration for economic growth.

We investigate fluctuations in the nominal effective exchange rates (NEERs) of East Asian currencies and the Asian monetary unit (AMU), which is computed as a weighted average of East Asian currencies during the global financial crisis. We find that NEERs were more stable for countries that continued to follow a currency basket system during the global financial crisis.

Furthermore, we investigate the relationships among NEERs, AMU, and AMU deviation indicators, which indicate the extent of the deviation in the exchange rate of each East Asian currency from a benchmark rate given in terms of the AMU. By comparing NEERs with a combination of AMU and AMU deviation indicators, we find that there is a strong relationship between them, both before and after the global financial crisis. These results indicate that a coordinated exchange rate policy aimed at stabilizing the AMU deviation indicators will be effective in stabilizing the NEERs of East Asian currencies. In this respect, the AMU deviation indicators, which indicate intraregional exchange rates among East Asian currencies, play a crucial role.

Because NEER trade weights are widely similar among East Asian currencies, a policy aimed at stabilizing a home currency against its NEER may lead to a coordinated exchange rate policy without a common consensus among East Asian countries. In the future, however, coordinated monetary policies should be considered along with coordinated exchange rate policies.

This essay focuses on European monetary unification to be completed before the 21st century (1999). In December 1991 in the Dutch city of Maastricht the German Central Bank (Bundesbank) clearly showed that it intends to set and influence the economic policies of all of Europe. Utilizing Game theoretical analysis this paper argues that for Germany a policy of noncooperative leadership is the best strategy. However, for the rest of Europe gaining German cooperation in setting monetary policy is in the community's overall interest. Given the long run need to coordinate policy in a unified Europe, the Bundesbank will cooperate with the rest of EC members. Until the final outcome of this union becomes known, a climate of uncertainty will hover over financial management practices.

The purchasing power parity hypothesis is investigated within a highly economically integrated set of nations, namely the European Monetary System. We use the Phillips‐Hansen Fully Modified Ordinary Least Squares procedure, which for the first time allows for an unrestricted cointegration test of the PPP doctrine. We sequentially test for the weak and strong form of PPP.