The ins and outs of European Monetary Union: some public policy issues

This paper reviews the problems, other than the foregone benefits of EMU, that would face countries‐either EU members or non‐members closely associated with the EU‐as a consequence of staying outside EMU. Problems both economic and political are discussed, but the primary focus is on economic issues. It is concluded that there may be minor adverse consequences; but they are only a possibility. What is clear is that claims that there will inevitably be major adverse consequences ‐ higher inflation or interest rates, or lower growth, for example ‐ are entirely without foundation.