The essential feature of a monetary union is the irrevocable fixing of nominal exchange rates of participating countries? currencies. Regions, as sub-units of Member States, will not be directly affected by such a decision since they have - by definition - no access to nominal exchange rate...

A frequently expressed criticism on regional polices in Europe is that they seem to have hardly any effect in view of the little progress in regional convergence over the last two decades. The paper criticises this view for being overly simplistic for several reasons. First, it does not...