Countries in the Euro zone are restrained from pursuing their self- interest by mutually respecting each other’s sovereignty and independence rights. However, Euro zone must adhered to EMU operating principles. Good governance must be practice at all transactions to avoid future crisis2.
January 1, 1999 saw the official launch of the Economic and Monitory Union (EMU). On that day, eleven European countries joined the EMU and five more followed suit years later. Now, EMU is comprised of sixteen member European countries. The first to join were Austria, Belgium, Germany, France, Ireland, Italy, Finland, the Netherlands, Portugal, Luxembourg, and Spain. Greece followed in 2001, then Slovenia in 2007 while Cyprus and Malta joined in 2008. The last to join was Slovakia in 2009. EMU countries adopted Euro as a single currency for transaction purposes. The chief reasons that lead to EMU were mainly to stabilize prices, macroeconomic environment, banking system, financial markets as well as increase trade competitiveness and boost flexibility in the member countries3. Before and after the official launch, different people had different views concerning the sustainability of the Euro Zone especially on areas of viability and desirability. Supporters of EMU claimed that common currency has the potential to improve trade, attract more foreign direct investment, stabilize wages and enhance business strategies of member countries. On the contrary, they are opponents who predict that Euro zone is heading for a disaster4. They pegged their arguments on the premise that countries in the Euro Zone are diverse and put individual interest forward at the expense of the EMU. There are benefits and costs associated with Economic and Monitory Union. If costs are more than benefits, EMU may not survive in future and if vice versa, union will endure the test of time.
The first advantage is that common currency reduces costs