The euro experience : lessons for Africa

This chapter highlights key shortcomings and failures of Europe's Economic and Monetary Union - essentially the most advanced case of regional integration in the world, inspiring numerous other initiatives including among developing countries, but fatally flawed and limited. The European experience offers important and timely lessons for other regions that are already integrating and planning to go still further, in particular with respect to the plans for the most extensive widening and deepening of integration in West and Central Africa. In particular, the dangers for West and Central Africa to avoid include following the Euro area’s single-minded focus on price stability and the lack of a central fiscal authority. The chapter shows that market integration must be paralleled by policy integration; the persistent divergences in competitiveness among member nations must be prevented; and that monetary union without fiscal union is not viable.