The invertive character of the unity of the European monetary space

V. Kornivska

Economy and Forecasting, 2013, issue 1, 109-122

Abstract: The article presents the results of an investigation on the problems of formation of a single monetary space in EU. Based on a historical analysis of the stage of creation of the European currency union and the development of .economic integration and supranational coordination in the European economic space, the author justifies the inverted character of the processes of creation of the euro area and proves that the unity of the European monetary space, on the one side, was not ensured by the general economic and fiscal unity of the Member Countries, and, on the other hand, it was introduced after the active development of the financial unity by liberalizing the capital movement in EU in 1970-1990s, which is the content of the inverted nature of the euro area. The unity of the euro area's monetary space and the integrating role of the single European currency were efficient in conditions of financial and economic stability, when the factors of fiscal disintegration were inactive. However, when they ceased to be neutral to the general economic situation, the monetary unity became a factor blocking the way out of the state of instability. Attaining the effectiveness of monetary unity in the euro area showed its neutral impact on economic growth and employment, which repeats, in the history of creation of the European currency union, already for the third time. In this context, the author concludes, that the monetary integration does not pursue general economic objectives, but, mostly the financial ones.

Date: 2013
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