Is the Euro, as a Common Currency, a Tool for Integration? EUMA Papers Vol. 5, No. 5, February 2008

[From the introduction]. Currently, there is an academic debate on whether economic integration precedes political integration or vice versa: this debate mainly focuses on explaining whether regional integration is caused by political or economic factors. Some assert that political decisions have been motivated by economic reasoning3, and explain that historical evidence proves that “descriptions of fluctuations of international economic integration identify clear economic dynamics behind political decisions.”4 Others believe that political decisions are the propellers of regional integration and, as Balassa states, “political motives may prompt the first step in economic integration.”5 Regardless of this debate, this paper will explain how the introduction of the euro has facilitated the EU’s regional integration process, which encompasses both economic and political integration, and has allowed Europe to blossom ¨into a continent that is widely admired as prosperous, diverse and caring.¨