European monetary union avoided currency crisis in "small" European economies such as Greece, Holland or Belgium. However, those economies that have not take the Euro as its currency; Denmark, Iceland and Swiss, have had serious currency problems. This fact has fortified the position that regional monetary unions are better than sovereign monetary systems. However, believe that monetary union will be consolidated as a principle of monetary theory with little controversy, like the principle of central bank autonomy as a tool to avoid high inflation, is still to be decided. The tension and distension between governments and central banks has changed according to the characteristics of the economic cycle. In Europe over the past three years we heard two very different expressions about its central bank policies:
First. Tight monetary policy damages the economic performance in some nations because it is not consistent with its economic traits.
Second. The presence of a single currency limited economic damage in those small economies by the absence of currency crisis.
The question is: will regional monetary unions be the long-term solution to confront the current economic crisis or is only a temporary solution proposed that will be dissipated in other phases in the business cycle?
