ABSTRACT
The concept of money pervades modern economic life. The institutional structure of the Treaty of Rome, whilst imposing a duty of coordination upon Member States, placed economic policy firmly within the national domain. Whilst monetary union raises questions about national identity and sovereignty and about the control of public power, the arguments most invoked to justify it are those of economic welfare. The continuing existence of national currencies would entail substantial indirect microeconomic costs. The rather dismissive attitude by many economists, notably in the United States, to the potential microeconomic benefits of a single currency is open to serious criticism. The assumption behind the argument, however, is that Member States have considerable autonomy in deciding the economic policy they pursue. The economic logic behind them has been criticised as being inflexible and insufficiently sensitive to the economic backdrop. The setting of monetary policy is a considerable power, however, as it is central to the running of economic policy.
