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A monetary union is where several countries have agreed to share a single currency among them, in the case of the EU, this is the Euro.
The pact was agreed upon to prevent over inflation from national governments passing to the European Central Bank (ECB), whose directive is to keep inflation under control. When the Stability and Growth Pact was drawn up, the leading countries that initially created the European Monetary Union(the single European currency-the Euro), such as Germany, were concerned that some countries would get round the rigorous monetary policy of the ECB by increasing government spending of public money within their own country which would create large budget deficit...
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Common topics in this essay:
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