Prima facie, the answer is straightforward. Having a single currency automatically implies having a single exchange rate and thus also a single exchange rate policy. Yet the repercussions of EMU go beyond these “automatic” consequences. BIS Review 44/2009  1  Prior to EMU, Europe consisted of open and, for the most part, small economies.
Because of the very large size of the external sector compared with the national economy, the exchange rate played a very important role in the economic performance of these countries. The move to monetary union implied the creation of a new economic entity – “euroland” – which is much bigger and much more closed than its component states.