Why then, one may ask, are markets still so suspicious? The main reasons lie in the specific set-up of a currency regime without a government in general and the euro area in particular. Although the euro area has a centralized monetary policy, fiscal policy is still in the hands of national authorities. Several problems arise in this context.
Introduction On 1 January of this year, the euro was introduced in 11 countries (EU-11 countries) with a total population of almost 300 million. The start of Stage Three of Economic and Monetary Union (EMU) established a combined economy that is only slightly smaller than that of the United States.