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Introduction
Economic integration offers numerous benefits to states of the Eurozone. These include multiple market opportunities, stable economies, mutual support, and specific monetary union with a single currency. Thus, the creation of the second one can add unnecessary complexity to the functioning of this organization. It means that there can be several undesired outcomes that can be listed to justify this position.
Benefits of Creating Two Monetary Unions in Eurozone
First, splitting Eurozone into two monetary unions will contribute to growing bureaucracy and the need for extra regulations to align the cooperation between partner states. It might deteriorate the quality of relations between them and reduce the speed of decision-making in complex situations or flexibility in terms of crises.
Second, the establishment of two monetary unions with independent currencies might demand additional market regulations and lead to the change in economic relations existing between partners. The questions of currency rates, their monitoring, and financial operations between members of the Eurozone will become more complex because of the need to consider all these factors.
Finally, the creation of two independent banks with their infrastructure and systems will make the financial aspect of the Eurozone more sophisticated. The existing body of knowledge evidences that simple structures are more effective in resolving complex issues and responding to alterations in external factors. For this reason, dividing a united zone into smaller ones with additional regulatory bodies might be an ineffective strategy.
Conclusion
Altogether, forming monetary units will not help to generate extra benefits for the Eurozone. It will lead to increased bureaucracy, demand extra financing, and promote the emergence of additional barriers between partners using different currencies. For this reason, the existing strategy seems the best approach to align the practical cooperation between partners.
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