The euro’s central promise back then, though, just as it is today, was to be stable money for people in the euro area. That is why price stability is the primary objective of monetary policy. Since 1999, the average inﬂation rate in Germany has actually been even lower than the rate observed in the D-Mark era.
Basically, an optimum currency area means that, in the longer term, there is no need for adjustment of the nominal exchange rate because other adjustment mechanisms are effective, say, as a result of internal flexibility or a high degree of labour mobility. That is clear in theory. In practice, there is a fundamental problem: how can the ability to “keep up” be assessed?