It is my view that the experience of the euro area to date only serves to highlight the fact that a currency union requires more flexibility in factor and product markets, and greater competition than do independent monetary areas. Flexible markets and strict fiscal rules are not just superfluous conditions for members of a monetary union.
They are necessities that make monetary union work by providing the adjustment mechanisms that the one size fits all monetary policy cannot. References: Baldwin R E (2006) “The Euro’s Trade Effect” ECB Working Paper, no. 594. De Grauwe P and Mongelli F P (2005) “Endogeneities of Optimum Currency Areas: what brings countries sharing a single currency closer together?” ECB Working Paper, no. 468.