Hostname: page-component-78c5997874-s2hrs Total loading time: 0 Render date: 2024-11-15T23:38:29.354Z Has data issue: false hasContentIssue false
  • English
  • Français

Moving Towards EMU: The Challenges Ahead

Published online by Cambridge University Press:  26 March 2020

John Arrowsmith  and
Christopher Taylor
Get access Rights & Permissions [Opens in a new window]

Abstract

The transition to monetary union in Europe, which began formally when Stage 2 started in January 1993, is now well over half way to completion, according to the deadlines set in the Maastricht Treaty. The first decisions on Stage 3 are approaching fast, yet the prospects for its commencement are still very unclear, and many important practical and policy issues are still in doubt. This article provides an overview of the EMU debate, covering the latest developments on convergence (Section 1), the main institutional matters still to be resolved before Stage 3 begins (Section 2), the key problems awaiting policy-makers in Stage 3 (Section 3), and finally the controversy about the economic rationale of EMU (Section 4). It concludes that the UK Government was wise to defer a decision on whether to participate in Stage 3 until the implications became clearer, but that it would be unwise to abandon the option, which it presently risks doing, by design or default.

Type
Articles
Information
National Institute Economic Review , Volume 158 , October 1996 , pp. 64 - 90
Copyright
Copyright © 1996 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Arrowsmith, J. (1996a), ‘Economic and Monetary Union: economic, financial and legal aspects of the transition to a single European currency’, in House of Commons, Treasury Committee (1996), see below, vol. II.Google Scholar
Arrowsmith, J. (1996b), ‘Pitfalls on the path to a single currency’, EUI Working Paper RSC no. 96/21, European University Institute, Florence, May.Google Scholar
Arrowsmith, J. and Taylor, C.T. (1996), Unresolved Issues on the Way to the Single Currency, National Institute of Economic and Social Research Occasional Paper 49.Google Scholar
Bank of England Act, 1946, Reprinted in The Bank of England Act, 1946 and the Charters of the Bank of England, Bank of England, undated.Google Scholar
Bank of England (1996), ‘Practical issues arising from the introduction of the Euro’, Issue no. 2, Bank of England, 16 September.Google Scholar
Barr, D. (1992), ‘The demand for money in Europe: comment on Kremers and Lane’, IMF Staff Papers, 39, September.CrossRefGoogle Scholar
Barrell, R. and Sefton, J. (1995), ‘Output Gaps. Some Evidence from the UK, France and Germany’, National Institute Economic Review, no. 151, February.CrossRefGoogle Scholar
Barrell, R., Morgan, J. and Pain, N. (1996), ‘The impact of the Maastricht fiscal criteria on employment in Europe’, a paper for the ‘Project Link’ meeting, New York, March 1996. Revised version of National Institute Discussion Paper no. 81, June 1995.Google Scholar
Bayoumi, T. and Eichengreen, B. (1992), ‘Shocking aspects of European Monetary Integration’, Centre for Economic Policy Research, Discussion Paper 643.CrossRefGoogle Scholar
Bishop, G. (1995), The EMI Report on the Changeover to a single Currency: Fundemanetally Flawed, Salomon Brothers International Limited, London, 23 November.Google Scholar
Buiter, W., Corsetti, G. and Roubini, N. (1993), ‘Excessive deficits: sense and nonsense in the treaty of Maastricht’, Economic Policy, April.CrossRefGoogle Scholar
Commission of the European Communities (1990), ‘One market, one money’, European Economy, 44, October.Google Scholar
Commission of the European Communities (1995), Europinion No. 5, Results of the Monthly Survey of European Opinion, July.Google Scholar
Commission of the European Communities (1996 a), ‘Report on convergence in the European Union in 1995’, European Economy, Supplement A, no. 1, January.Google Scholar
Commission of the European Communities (1996 b), ‘The Community Economic Outlook: 1995-1997, European Economy, Supplement A, no. 5/6, May/June.Google Scholar
Congdon, T. (1996), ‘Could monetary union work without political union ?’, in Davidson, I.D. (1996); see below.CrossRefGoogle Scholar
Corden, W.M. (1993), ‘European Monetary Union: the intellectual prehistory’ in Giovannini, A. et al., eds., The Monetary Future of Europe, Centre for Economic Policy Research Discussion Paper, March.Google Scholar
Cottarelli, C. and Kourelis, A. (1994), ‘Financial structure, bank lending rates and the transmission mechanism of monetary policy’, IMF Staff Papers, vol. 41, no. 4, December.CrossRefGoogle Scholar
Council of the European Communities/ Commission of the European Communities (1992), Treaty on European Union.Google Scholar
Crockett, A.D. (1994), ‘The role of convergence in the process of EMU’, in Steinherr, A., ed., 30 Years of European Monetary Integration: From the Werner Plan to EMU, Longman.Google Scholar
Davidson, I.D. (1996), European Monetary Union: the Kingsdoum Enquiry, Macmillan Press for Action Centre for Europe.CrossRefGoogle Scholar
Davies, G. (1996), Will a European recession kill the single currency?, Goldman Sachs International EMU Briefing Issue no. 4, 18 January.Google Scholar
Driver, R. and Wren-Lewis, S. (1996), ‘European Monetary Union: asymmetric shocks and inertia’, University of Exeter Discussion Paper in Economics, July.Google Scholar
Easton, W.W. and Stephenson, M.J. (1990), ‘The interest rate transmission mechanism in the United Kingdom and overseas’, Bank of England Quarterly Bulletin, May.Google Scholar
EMU City Working Group (1996), ‘Preparing for EMU’, British Bankers Association, Association for Payment Clearing Services, London Investment Banking Association, September.Google Scholar
European Monetary Institute (1995), The Changeover to a Single Currency, November.Google Scholar
European Monetary Institute (1996), Annual Report 1995, April.Google Scholar
Groupe plénier Hervé Hannoun (1996), ‘Passage à la Monnaie Unique’, AFB Diffusion, July.Google Scholar
Hamaui, R. (1996), ‘Why people fear the European single currency? a comparative analysis of public opinion’, in European Monetary Union: the Problems of the Transition to a Single Currency, Banca Nazionale del Lavoro Quarterly Review, Special Issue, March.Google Scholar
House of Commons, Treasury and Civil Service Select Committee (1993), The Role of the Bank of England, First Report, Vol. 1, Session 1993-4, HMSO, December.Google Scholar
House of Commons, Treasury Committee (1996), The Prognosis for Stage Three of Economic and Monetary Union, 8th Report, vol. 1, session 1995-96, HMSO, July.Google Scholar
House of Lords, Select Committee on the European Communities (1996), An EMU of ‘Ins' and ‘Outs’, 11th Report, Session 1995-96, HMSO, June.Google Scholar
Hughes Hallett, A.J. and Demertzis, M. (1996), ‘Is there convergence in a two-speed Europe? evidence from the labour markets’, draft in mimeo, March.Google Scholar
Hughes Hallett, A.J. and Ma, Y. (1996), ‘Changing partners: the importance of co-ordinating fiscal and monetary policies within a monetary union’, Manchester School of Economics and Social Studies, LXIV, 2, June.Google Scholar
Issing, O. (1994), ‘Monetary policy strategy in the EMU’, in O de Beaufort Wijnholds, J. et al., eds., A Framework for Monetary Stability, Kluwer Academic Publishers.CrossRefGoogle Scholar
Johnson, C. (1996), In With the Euro, Out With the Pound, Penguin.Google Scholar
Kenen, P.B. (1995), Economic and Monetary Union in Europe: Moving Beyond Maastricht, Cambridge University Press.CrossRefGoogle Scholar
Kingsdown Enquiry. See Davidson, I.D. (1996).Google Scholar
Kremers, J.M. and Lane, T.D. (1990), ‘Economic and monetary integration and the aggregate demand for money in the EMS’, IMF Staff Papers, 37, December.CrossRefGoogle Scholar
Krugman, P.R. (1990), ‘Policy problems of a monetary union’, reprinted in Krugman, ed., Currencies and Crises, MIT Press.Google Scholar
Lamfalussy, A. (1996), ‘The operation of exchange rate policy in Stage 3 of EMU’, Address to the Association for the Monetary Union of Europe 1996 Annual Conference, London, 19 June.Google Scholar
Lawson, N. (1992), The View from No. 11, Bantam Press.Google Scholar
Meade, J. and Weale, M. (1995), ‘Monetary union and the assignment problem’, Scandinavian Journal o f Economics, vol. 97, pp. 201–22.Google Scholar
Melliss, C.L. (1993), ‘Tradable and non-tradable prices in the United Kingdom and the European Community’, Bank of England Quarterly Bulletin, February.Google Scholar
Miles, D. (1994), ‘Fixed and floating-rate finance in the United Kingdom’, Bank of England Quarterly Bulletin, February.Google Scholar
Monticelli, C. and Strauss-Kahn, M.-O. (1993), ‘European integration and the demand for broad money’, Manchester School of Economics and Social Studies, LXI, 4, December.CrossRefGoogle Scholar
Montecelli, C. and Viñals, J. (1993), ‘European monetary policy in Stage Three: what are the issues?’ in Giovannini, A. et al., eds., The Monetary Future of Europe, London : Centre for Economic Policy Research, March.Google Scholar
Moore, N.E.A. (1996), ‘The UK changeover to decimal currency in 1971 and possible lessons for the introduction of a single European currency’, in House of Commons, Treasury Committee (1996), see above, vol. II.Google Scholar
Moutot, P. (1995), ‘Preparing for monetary union: the view of the EMI’, International Conference Group conference paper, London, 3 July.Google Scholar
Oecd (1995), ‘Effects of ageing populations on government budgets’, OECD Economic Outlook, 57, June.Google Scholar
Oecd (1996), OECD Economic Outlook, 59, June.Google Scholar
Portes, R. (1996), ‘Implementing EMU’, AEA Papers and Proceedings, May.Google Scholar
Roll Committee (1993), Independent and Accountable: A New Mandate for the Bank of England, Report of an Independent Panel chaired by Eric Roll, Centre for Economic Policy Research, October.Google Scholar
Taylor, C.T. (1995), EMU 2000? Prospects for European Monetary Union, The Royal Institute of International Affairs.Google Scholar
Taylor, C.T. (1996), ‘The separation of monetary and fiscal policy in Stage Three of EMU’, paper for a workshop on ‘The Institutional Aspects of EMU’, Centre for European Law, Kings College, London, 26 January. (Forthcoming by Kluwer International Publishers, Autumn.)Google Scholar
Thygesen, N. (1996), ‘Should budgetary policies be coordinated further in economic and monetary union - and is that feasible?’, in European Monetary Union: The Problems of the Transition to a Single Currency, Banca Nazionale Quarterly Review, Special Issue, March.Google Scholar
Treaty on European Union. See Council of the European Communities, 1992.Google Scholar
Turner, P. and Van't dack, J. (1993), Measuring International Price and Cost Competitiveness, Bank for International Settlements Economic Papers, 39, November.Google Scholar