 Its potential drawbacks are that it provides a target for speculative attacks, avoids exchange rate volatility, but not necessarily persistent misalignments, does not by itself place hard constraints on monetary and fiscal policy and that the credibility effect depends on accompanying institutional measures and a visible record of accomplishment.A currency or monetary "union" is a multi-country zone where a single monetary policy prevails and inside which a single currency or multiple substitutable currencies, move freely.A monetary union has common monetary and fiscal policy to ensure control over the creation of money and the size of government debts.