Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- List of conference participants
- Foreword
- 1 Introduction
- 2 Banking competition and European integration
- Discussion
- 3 Banking, financial intermediation and corporate finance
- Discussion
- 4 How (not) to integrate the European capital markets
- Discussion
- 5 European financial regulation: a framework for policy analysis
- Discussion
- 6 Corporate mergers in international economic integration
- Discussion
- 7 Capital flight and tax competition: are there viable solutions to both problems?
- Discussion
- 8 Reflections on the fiscal implications of a common currency
- Discussion
- 9 Currency competition and the transition to monetary union: does competition between currencies lead to price level and exchange-rate stability?
- 10 Currency competition and the transition to monetary union: currency competition and the evolution of multi-currency regions
- Discussion of chapters 9 and 10
- 11 Problems of European monetary integration
- Discussion
- Index
11 - Problems of European monetary integration
Published online by Cambridge University Press: 04 August 2010
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- List of conference participants
- Foreword
- 1 Introduction
- 2 Banking competition and European integration
- Discussion
- 3 Banking, financial intermediation and corporate finance
- Discussion
- 4 How (not) to integrate the European capital markets
- Discussion
- 5 European financial regulation: a framework for policy analysis
- Discussion
- 6 Corporate mergers in international economic integration
- Discussion
- 7 Capital flight and tax competition: are there viable solutions to both problems?
- Discussion
- 8 Reflections on the fiscal implications of a common currency
- Discussion
- 9 Currency competition and the transition to monetary union: does competition between currencies lead to price level and exchange-rate stability?
- 10 Currency competition and the transition to monetary union: currency competition and the evolution of multi-currency regions
- Discussion of chapters 9 and 10
- 11 Problems of European monetary integration
- Discussion
- Index
Summary
The debate on European Monetary Integration of the past year has been driven by the French amibition to transform economic realities by institutional arrangements and the German fear that they might succeed. Following the strong impetus of the Delors Committee, and reinforced by a strategic exploitation of the developments in Eastern Europe, against German and UK resistance, European monetary integration is now in the mail.
A poll of 1,036 European business leaders conducted in 1988 showed that 86% (ranging from 60% in Germany to 98% in Italy and France) favoured a common currency. A majority of those questioned (from 52% in Germany to 87% in France) favoured a currency unit that represented an average of the EC currencies such as the ECU rather than a single currency. The Delors Report (pp. 14–15) has pushed the discussion much further, defining the issues and the agenda:
A monetary union constitutes a currency area in which policies are managed jointly with a view to attaining common macroeconomic objectives. As already stated in the 1970 Werner Report, there are three necessary conditions for a monetary union:
– the assurance of total and irreversible convertibility of currencies.
– the complete liberalization of capital transactions and full integration of banking and other financial markets, and
– the elimination of margins of fluctuations and the irrevocable locking of exchange rate parities.
The first two of these requirements have already been met, or will be met with the completion of the internal market programme. The single most important condition for monetary union would, however, be fulfilled only when the decisive step was taken to lock exchange rates irrevocably.
- Type
- Chapter
- Information
- European Financial Integration , pp. 305 - 327Publisher: Cambridge University PressPrint publication year: 1991
- 7
- Cited by