  Monetary integration has both costs and benefits. Europeans have a strong
aversion to exchange rate instability. From this perspective, the EMS has shown
its limits and full monetary union involving a single currency appears to be a
necessity. This is the goal of the EMU project contained in the Maastricht
Treaty. This paper examines the pertinent choices: independence of the Central
Bank, budgetary discipline and economic policy coordination. Therefore, the
implications of EMU for the economic policy of France will be examined. If the
external force disappears, the public sector still cannot circumvent its
solvency constraint. The instrument of national monetary policy will not be
available so the absorption of asymmetric shocks will require greater wage
flexibility and fiscal policy will play a greater role. The paper includes
three parts. The first concerns the economic foundations of monetary union and
the costs it entails. The second is devoted to the institutional arrangements
under the Treaty of Maastricht. The third examines the consequences of monetary
union for the economy and the economic policy of France.
