With the launching of Economic and Monetary Union (EMU) on 1 January 1999, the prerequisites should be in place to make European economies more competitive in the long run. Skeptical economists have forwarded numerous reasons why EMU will not work, usually based on the "optimal currency area" theory. Any further progress in the economic convergence of member states certainly will require monetary union as its basis. For the Austrian economy, participating in EMU is a necessary and logical step following its past economic policy, which will nevertheless present business and politicians alike with new challenges.