This book examines the monetary integration of the group of countries which constitute the Economic and Monetary Union (EMU), signalling the emergence of a truly European economy. The authors devote their considerable expertise to the analysis of macroeconomic policies within EMU and the economic analysis underlying the conduct of these policies.The authors first analyse the development of the euro area from a historical perspective. They then examine the criteria for the first eleven countries to qualify for EMU and speculate whether the same countries would have joined if the qualification date had been a year later. The authors go on to examine purely macroeconomic aspects of the euro area including: the degree of real convergence in the euro area the short-run and long-run determinants of the euro area's current account the euro area's financial markets and implications for the international role of the euro the organizational structure and internal procedures of the European System of Central Banks the Eurosystem's single monetary policy strategy fiscal policy and the Stability and Growth Pact exchange rate policy issues. This book will become required reading for scholars and policymakers in the area's of European studies, macroeconomic policy and financial economics.