The course introduces the students to the main issues and problems associated with the process of European economic and monetary unification and with the adoption of the euro. After having explained the reasons that led to the 1979 adoption of a fixed exchange rate system in Europe following the fall of the Bretton Woods system, the European Monetary System (EMS) is described, together with the main events that characterized its existence. The European Economic and Monetary Union (EMU) is also analyzed, so as to understand the main reasons that led to the adoption of the euro and to the abandonement of the pre-existing European national currencies. The institutional events described in the first part of the course are then interpreted in the light of different theoretical approaches, to be analyzed in detail: credibility theory, that may contribute explaining the success of the EMS in reducing the inflation rate in some European countries; fixed exchange rates speculative attacks theory, to explain the 1992-93 EMS crisis; the theory of optimum currency areas (OCA theory), to understand what should the pre-conditions be, if any, for a country to join a monetary union. The final part of the course will discuss the potentional international role of the euro, together with the US dollar and with the currencies of emerging countries, first of all the Chinese yuan renmimbi.