Seminar paper from the year 2018 in the subject Politics - International Politics - Topic: European Union, grade: 1,0, University of Sussex (School for Law, Politics and Sociology), course: European Governance, language: English, abstract: The monetary union has proved to be a highly sensitive area of European Integration, as there are several Member states who decided to opt out or have not yet adopted the euro as their currency. Especially during the international banking and financial crisis which later turned into the eurozone crisis, monetary union has been discussed fiercely to the extent that there have been calls to expel Greece from the euro.

As Andrew Moravcsik puts it, the nature of the eurozone was a ticking time bomb (2012). Even Mario Draghi described the incomplete financial integration as the "Achilles' heel" of the Economic and Monetary Union (2014). During and after the crisis, however, the Member states have implemented a number of institutions and instruments, trying to solve the current crisis and to make the monetary union more sustainable.

The question of this essay is whether the monetary union is likely to fail if there is no further political integration. The essay is structured as follows. In the second chapter I outline the main causes and consequences of the crisis. In the following chapter I demonstrate the theory of Optimal Currency Areas and discuss to what extent the EMU fulfils the criteria. The fourth chapter points out institutional adjustments that have been introduced since the beginning of the crises and suggest further steps. On this basis, chapter five and six discuss the need for political integration and debate measures such as a budgetary union.