Introduction The Evolution towards European Monetary Union

Discussing the prospect of monetary union in Europe is especially relevant when studying exchange rate determination. But it is also to some extent paradoxical, as the purpose of this project is to eliminate the problems related to exchange rate movements — at least among member countries. This is why it seems appropriate to start from such problems in order to show that there is a good case for monetary union at regional level. In this context, one may add that circumstances seem to be becoming more favourable, or at least a touch of optimism is permitted. However, many conditions still have to be fulfilled. These are the main points which will be considered below.