This study demonstrates the link between rising levels of capital mobility and European financial and monetary integration. State policies are driven and constrained by the financial structure of the international political economy. However, political adaptation to structural conditions can itself force changes in the structure – a process of ‘structuration’. Practically, the study outlines the rise of capital mobility in the post-war period, and argues that the creation of a European Financial Area was an imperative of the associated deregulatory dynamic. The consequences of this development for state sovereignty are outlined in terms of the Capital Mobility Hypothesis. The proposition is advanced that political motivation to reassert some degree of state autonomy is the driving force behind the move to a single currency. In taking this innovative policy step, the EU countries will have challenged the financial structure by reasserting some degree of political control over the way finance flows around the global economy.