THE FUTURE OF EMU

This article deals with the future of the exchange rate system in Euro pe. In spite of the problems the system has faced during the last year , EMU should not be regarded as dead and buried. The difficulties are caused by the dominant role of Germany, the lack of a coordinated econ omic policy in Europe and problems with asymmetric shocks. The author claims, however, that even though there are considerable problems in t he European economies which make the process towards an economic union difficult EMU is the best alternative in order to guarantee stable gr owth in Europe.