ABSTRACT
Free capital movements and efficient financial markets greatly facilitate direct investment. They provide the basis for transactions and for the safety of payment flows, which are the financial equivalent of real integration. The global financial markets promote and strengthen market structures. A number of emerging economies have become swiftly integrated in the global financial markets. The global financial markets are certain to test the euro, the political and economic conditions in the euro area and the stability orientation of the European Central Bank as well. The disappearance of exchange risk within the monetary union has substantially reduced the erstwhile hedging costs, has fostered competition on many markets in the euro area, and has promoted structural changes in many economic and political fields. In a world of increasing real economic interdependence, and with global financial markets, the question of monetary integration is also becoming more urgent.
