Eurotsoon kui optimaalne valuutapiirkond - poliitilise integratsiooni tähtsus valuutaliidu toimimiseks

Abstract

The aim of my bachelor thesis was to explore and analyze the euro area according to optimal currency theory. The first part of this thesis gave an overview about the theoretical background, brought out and explained seven main criteria which have to be met in order to create currency union. Furthermore it also viewed the costs and benefits which might occur when adopting single currency and joining the monetary union. The empirical part focused on putting the theory into practice. All seven previously mentioned criteria – price and wage flexibility, factor mobility, degree of economic openness, market integration, similarities of inflation rates and finally, fiscal and political integration were analyzed according to euro area and its member states. As a result of this I found out that only two criteria were more-less fulfilled: these were market integration and similarities of inflation rates. Other criteria were not met and therefore my hypothesis was confirmed: eurozone is not an optimal currency area. I also dedicated whole chapter to the most important criteria: political integration, where I analyzed which interests dominate in the euro area and who benefits from it. I explained two main political models which have influenced eurozone the most. These models were intergovernmental bargaining, a Franco-German deal and supranational politics, international institutions and investors. As a result I found out that the most influential actors in euro area are Germany and France, whose interests dominate in the currency union. Unfortunately this does not benefit the union as a whole and is beneficiary only to the main actors in the euro area. In order to eurozone to function properly the main actors should be supranational instead of intergovernmental. To conclude I must admit that at this moment euro area is definitely not an optimal currency area and as long as there is a lack of political will and integration, the eurozone will not fit to be one also.