Progressive integration has been a significant characteristic of economic development in the last few decades worldwide and in Europe - where it has found expression notably in the European Community (EC), now the European Union (EU). The issue of monetary integration has been central to the discussion on European economic integration. This text aims to select the more relevant aspects and developments, placing them in a robust conceptual structure, and integrate theoretical developments with the results of empirical research and of policy analysis. The authors explain the logic of the dynamic process, describe the structural features of the European economy, and depict the historical developments so as to give a sound basis for the understanding of the present situation and the likely future developments. In addition, it sets the European developments in the light of global developments. This revised edition covers recent developements, such as the setting up of the economic and monetary union, the widening of the EU, updated data, and integrates the results of recent theoretical and empirical work.