EMU and the euro will face a number of challenges in the future. Two such challenges are examined here:
first, the endurance prospects for the euro, and
second, the inflation performance of the euro area during the coming ten years.
How will it respond to them? This report provides a set of tentative answers based on the history of monetary unions and of stabilization policies. This body of evidence is exploited as the prime basis for conjectures and forecasts presented.