In the first part I will look at the institutional framework of European Monetary Union and examine what caused the euro area to flounder. In the  BIS central bankers’ speeches  1  second part, based on my comparison with Switzerland, I will make some suggestions as to how European Monetary Union might be strengthened.
We should further note that a simple Taylor rule of the form  6  See ECB (2004). 7  See Amato92005). 8  See Woodford (2003) p. 279. 9  For the analysis of monetary policy in the simple model with and without cost-push shocks, see Gali (2002).