Monetary union, social policy and the problem of a redistribution-proof European identity

Though most scholars agree that the common European currency is an experiment of immense scale, the socio-political consequences have hardly been taken into account so far. The abandonment of national currencies means the renunciation of an important buffer-mechanism between different economies. Thus necessary changes in the exchange rates muse be replaced by changing prices and wages or by mobility. If this does not work unemployment is likely to emerge. The political visibility of this cause for unemployment is likely to trigger demands for transnational social political compensation. The willingness to contribute to this kind of trans-national social policy crucially depends on a feeling of belonging together, i.e. on a collective European identity. But the prerequisites for its development are lacking, hence setting narrow limits for redistribution on the European level. Thus unsolved social political tensions caused by the common European currency might threaten further European integration.