A stable public policy environment is expected to foster business activity, as it lowers the risk premia paid either implicitly or explicitly in many transactions. The clearest example of a reduction in the risk premia resulting from Monetary Union is the fact that there is no longer any need for currency hedging in transactions across the countries of the euro area.
Through the introduction of the single currency, the euro area of today can thus increasingly be perceived as one large market. It is a market that extends from Lisbon to Helsinki and - in the near future - from Dublin to Athens, as Greece will be joining Monetary Union as from 1 January 2001.