Single Market and Single Currency: Intended and Unintended Effects

International audienceFor those who supported the project of creating a single currency, monetary union was seen as the completion of economic integration and of the Single Market. This combination was expected to boost economic growth and foster economic convergence among EU economies. It has led to a significant intensification of economic and financial integration: trade in goods and services has increased, cross-border provision of services and labor commuting too; labor and capital have also become more mobile. But for the lack of significant progress in political integration and collective decision-making, member state governments have been prone to resort to tax competition and other non-cooperative strategies. Although this has tended to increase economic inequalities and asymmetries among EU member states, the outlook for more cooperative strategies is now mixed: tensions tend to exacerbate and public opinions are expecting collective action, but agreement on common policies is made more difficult by existing differences in economic situations and performance