No CrossRef data available.
Article contents
Sense and Nonsense About the Single European Currency
Published online by Cambridge University Press: 03 July 2018
Extract
The project to introduce a single currency is the most daring step so far in European integration. Indeed, it can be correctly described as revolutionary. It is much more far-reaching than previous moves in this direction over the last 15 years, such as the harmonisation of regulations or the ending of exchange controls; it is intended not as an incremental advance, but as a complete transformation of Europe's financial arrangements.
The audacity of the single currency project is the more striking, in that it is a “revolution from above” rather than a “revolution from below”. The driving force has not been popular dissatisfaction with the existing currency arrangements, but the integrationist ambition of certain members of the European élite, particularly the German Chancellor, the French President and the President of the European Commission. (The integrationist ambition appears to attach to the positions ex officio and to be quite unaffected by the particular individuals who currently fill them.) These members of the élite emphasize the political nature of the single currency project, not the economic benefits. For example, Chancellor Kohl has said that European economic and monetary union (EMU) should prevent future wars in Europe.
- Type
- Research Article
- Information
- Copyright
- Copyright © Staple Inn Actuarial Society 1998
References
Notes
(1) Bresciani-Turroni, Constantio The Economics of Inflation (London: George Allen & Unwin, 1937), pp.46.)Google Scholar
(2) Johnson, Christopher In with the Euro, Out with the Pound (London: Penguin Books, 1996), pp. 106–27Google Scholar.
(3) The ECOFIN-Council is the Council of Ministers, when it is attended by finance ministers. The Council of Ministers decides on whether legislative proposals emanating from the European Commission should be submitted to national parliaments. The Council of Ministers consists of foreign ministers when foreign policy is under consideration, of transport ministers when the subject is transport policy and so on.
Note that Germany is opposed to Russian membership of the European Union. But how can any settlement in Europe guarantee peace if Russia is an outsider? Kohl avoids this difficult subject, although it is fundamental to the security of Germany and Europe.
(4) The quotation is from Regling, K. “The Stability and Growth Pact”, paper given at the Royal Institute of International Affairs' conference on European Economic and Monetary Union: the politics and practicalities in London on 23rd October 1997 Google Scholar.
(5) The Euro-X committee supplements ECOFIN; it consists of finance ministers from the 11 countries destined to participate in Euro-land from the start. The “economic and financial committee” is the successor to the EU monetary committee which prepared ECOFIN meetings. See supplement on “The birth of the Euro” in the Financial Times, 30th April 1998 Google Scholar.
(6) Concise Oxford Dictionary (Oxford: Oxford University Press, 1982), p. 953 Google Scholar.
(7) The claims made in this paragraph are contentious, being opposed by the neo-Austrian school which favours the denationalization of money. For further discussion, see Congdon, T. G. “Is the provision of a sound currency a necessary function of the state?” National Westminster Bank Review 1981 Google Scholar.
(8) The subject was discussed in two articles in successive issues of Central Banking, “ESC profits: a Bundesbank miscalculation”, pp. 19–24, in the winter 1996 issue and ‘“Dispute over ESCB profits”, pp. 7–10 in the spring 1997 issue. (The quotation is from p. 23 of the winter 1996 issue.)
(9) The subject has also been reflected in the European Monetary Institute's Annual Reports.
(10) The following discussion of the chain of security to protect bank deposits was prompted by an exchange with Lord Simon and Mr. Howard Davies, then Deputy Governor of the Bank of England, at a televised debate held on the Bloomberg television channel in 1997. A short correspondence with Mr. Davies followed. I am grateful to Mr. Davies for his interest, although we hold different views.
(11) Fay, Stephen Portrait of an Old Lady: turmoil at the Bank of England (Penguin Books: London, 1988), pp. 141–72Google Scholar.
(12) Adams, James Ring and Frantz, Douglas A Full Service Bank: How BCCI stole billions (London, Sydney and New York: Simon & Schuster, 1992), p.29.Google Scholar
(13) Eltis, Walter The Creation and Destruction of the Euro (London: Centre for Policy Studies, 1997)Google Scholar.