ABSTRACT
Monetary policy is now concentrated in a single actor, the European Central Bank, which sets a unique nominal interest rate for all member countries in order to control inflation and to avoid deflation. The monetary union can be seen as a structural break for the European Union (EU). The past was characterized by an increase in European integration, namely the single market, the monetary union and the Eastern enlargement. Today, the idea of a 'United States of Europe' is no longer an attractive option for most European populations. The political systems at national and supranational levels responded with conditional rescue packages and major reforms of the European institutional setting. The sovereign debt crisis has led to a two-speed Europe with an extension of integration within the euro area. The Euro Plus Pact aims to increase price competitiveness by wage restraint in the public and private sectors. The European Court of Justice was assigned with the power to impose financial sanctions.
