| Abstract : | The recent financial crisis shook the foundations of the EMU architecture and brought into light the discussion of the “Optimal Currency Areas” theory. The main objective of this thesis is to identify the reasons why Eurozone does not constitute an OCA, as described by Mundell‟s theory. Therefore, the theory of OCAs is presented and applied to the Eurozone. Also, alternative scenarios of the future of the Eurozone are being discussed along with the alternative policies that the policymakers should adopt in order to optimize its function and reduce the social costs that the participation in a monetary union entails for its member states. Finally, it is strongly supported the argument that the Eurozone is a pure political project and that the next step should be the creation of the political union as a solution to the “moral hazard” problem created by all the alternatives presented.
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