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There is no historical precedent for the institutional set-up of the eurozone. However, it is an arrangement that could not and cannot escape the universal laws and principles of economics. This paper tries to look generally at the consequences of this integration project from the perspective of the former monetary hegemon, Germany, whose hegemony largely ended as a result of the monetary integration method chosen. Those consequences are of course more apparent in bad times than they were in good times. We then specifically examine the problem of convergence and divergence within a currency area and discuss the issue of competitive devaluation. In the conclusion we try to formulate the fundamental dilemma faced by the former monetary hegemon. Its solution will affect those inside and outside the integration project. Adapted from the source document.

The paper explains the theory of bureaucracy developed by William A. Niskanen. While sociologist Max Weber's analysis treats bureaucrats as "eunuchs" or automatic machines responsible for public well-being, Niskanen tries to apply standard neoclassical economic models to explain the behavior of bureaucracy as a whole. With this background, he concludes that the bureaucracy will concentrate on bargaining processes with the sponsor & not on improving the quality of its services to the public. This is a simple explanation of why the bureaucratic organization provides systematically worse products & services to its customers than does the standard private firm operating on the market. 19 References. Adapted from the source document.