The most striking example of a monetary union at the turn of the 21st century was the creation of a single currency among most countries of the European Union (EU) – the euro. This example shows the interaction of economic and political factors in the construction of a monetary union. From an economic point of view, a monetary union helps to reduce transaction costs in an increasingly integrated regional market. It also contributes to increasing price transparency and thus increasing intra-regional competition and market efficiency. In addition, a monetary union was seen as an essential step towards the further political integration of the EU. The EMA had short-term effects, but also played a role in the final establishment of the European Union. [16] The European Union is the current monetary union, which has a common currency, the euro, and a high degree of cooperation and integration between Member States. [13] The EMA contributed to the existence of a common currency and a central bank. The objectives are generally to promote trade by facilitating the payment of international debt and to maintain a stable exchange rate in each country by providing loans to cope with temporary balance of payments difficulties. After the Second World War, there was a significant movement towards multilateral monetary agreements, the most important of which were the International Monetary Fund and the European Payments Union (1950). Customs unions such as the European Community (EC) and the European Free Trade Association often require a high level of monetary cooperation, and the increasing European integration that has transformed the EC into the European Union (EU) has also led to increased monetary cooperation through the European Monetary System.
In 1999, most EU countries adopted a single currency, the euro, which replaced the currencies of 12 Member States in 2002; other EU countries have since adopted it. The IMF`s objective was to monitor exchange rates and identify countries in need of global monetary support. The World Bank, originally called the International Bank for Reconstruction and Development, was created to manage the funds available to provide assistance to countries that had been physically and financially devastated by the Second World War. In the twenty-first century, the IMF has 189 member countries and still supports global monetary cooperation. .