Abstract

The legal regime of the Economic and Monetary Union (EMU) is differentiated in two ways. While the rules on economic union apply with few exceptions to all member states, most Treaty provisions on monetary union are applicable only to those member states that have introduced the common currency. The Treaty on the Functioning of the European Union (TFEU) establishes a system of overlapping competences consisting primarily of measures adopted by the member states. During the initial phase of the European Economic Community (EEC), exchange‐rate fluctuations or flexible exchange rates obstructed the development of a workable capital market. The Treaty of Lisbon provides that the European Union is to establish a monetary union whose currency is the euro. The TFEU provides for institutional and procedural mechanisms aimed at protecting the stability of the common currency. The euro has become a stable and internationally recognized currency.