EU446      Half Unit
The Political Economy of European Monetary Integration

This information is for the 2023/24 session.

Teacher responsible

Prof Stefan Collignon


This course is available on the MSc in European and International Public Policy, MSc in European and International Public Policy (LSE and Bocconi), MSc in European and International Public Policy (LSE and Sciences Po), MSc in Human Resources and Organisations (International Employment Relations/CIPD), MSc in Political Economy of Europe, MSc in Political Economy of Europe (LSE and Fudan) , MSc in Political Economy of Europe (LSE and Sciences Po) and MSc in Political Science (Political Science and Political Economy). This course is available with permission as an outside option to students on other programmes where regulations permit.

This course has a limited number of places (it is controlled access) and demand is typically very high. Priority is given to students from the European Institute, so students from outside this programme may not get a place.


A basic understanding of macroeconomics is essential, which is why the auditing of the EU409 Moodle course is highly recommended.

Course content

The purpose of this course is to analyse the process of European monetary integration and its implications for the institutions of economic governance in the EU. There will be a strong emphasis on using the experience of the financial and economic crises since 2008 and the COVID-19 pandemic as sources of evidence to assess both the performance of EMU and the theories about monetary integration. We consider the political and economic rationale for the establishment of EMU. We study the theory of optimal currency areas and its relevance today.  In particular, we study the incomplete nature of the Eurozone and how this incompleteness is a source of instability. Indicative questions addressed in this course include: how and why did the EU develop the EMU project? Did economic theories prepare us for the Euro area crisis of 2010-12? What are the challenges for member states in adjusting to the discipline of the 'Euro-zone'? How does the Euro affect the ability of member states to adjust to periods of crisis and to external shocks, in particular to a shock such as the COVID-19 pandemic? Is the sovereign debt crisis of 2010 indicative of imbalances within the EU and basic flaws in its institutional design? What are the collective action problems that explain the incompleteness of the monetary union? What is the role of the ECB in this process? Is a fiscal union necessary to make a monetary union sustainable in the long run?


This course is delivered through a combination of lectures and seminars totalling a minimum of 25 hours across Winter Term.  This course includes a reading week in Week 6 of Winter Term, and a review session will be held at the start of the Spring Term to prepare for the online assessment.

Formative coursework

One 2,000-word essay and one group essay of up to 3,000 words.

Indicative reading

  • Paul De Grauwe (2022) The Economics of Monetary Union (Oxford University Press, 14th ed.); 
  • Kenneth Dyson and Kevin Featherstone (1999) The Road to Maastricht, OUP;
  • Waltraud Schelkle (2017) The Political Economy of Monetary Solidarity, Understanding the Euro Experiment, Oxford University Press;
  • Special issue (2006): 'Economic Governance in EMU Revisited', Journal of Common Market Studies vol.44, No.4 (November);
  • Stefan Collignon, "The European Republic; Reflections on the Political Economy of a European Constitution". The Federal Trust, London, England, 2002. Download from


Online assessment (100%) in the ST.

The online assessment for this course will be administered via Moodle.  Questions will be made available at a set date/time and students will be given a set period in the ST to complete the answers to questions and upload their responses back into Moodle. 

Key facts

Department: European Institute

Total students 2022/23: 67

Average class size 2022/23: 17

Controlled access 2022/23: Yes

Lecture capture used 2022/23: Yes (LT)

Value: Half Unit

Guidelines for interpreting course guide information

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Personal development skills

  • Self-management
  • Team working
  • Communication
  • Application of numeracy skills