Structural Convergence vs. Systems Competition: Limits to the Diversity of Labour Market Policies in the EMU

Does a monetary union, for it to be successful, impose limits on the diversity of labour market policies and institutions in its member states? I argue that one should not overstretch functionalist arguments in this matter; the problem at hand is political and the challenge is to identify common standards and policy rules that are functionally relevant (taking on board a combination of arguments on what a wellfunctioning monetary union requires) and legitimate in view of shared aspirations across the member states. What is 'needed' and what is 'imposed' by monetary unification in Europe, depends on the fundamental aspirations that drive the European project at large.