DP405 Unresolved Issues on the Road to EMU in Europe

Author(s): Peter Bofinger
Publication Date: March 1990
Keyword(s): EMS, European Economic and Monetary Union, Macro Economic Policy Coordination, Monetary Regimes
JEL(s): 310, 431, 432
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=405

The paper examines the integration strategy laid down in the Delors Committee Report. It focuses on two issues: Is a comprehensive conceptual framework for monetary coordination in Europe needed already in Stage One, and how could it be designed? What is the rationale for a training period for the European System of Central Banks, and is it possible to share responsibilities in the field of monetary policy? Section 2 examines the coordination process starting on 1 July 1990 and identifies its main deficiencies. Section 3 discusses proposals for a pooling of monetary instruments in Stage Two and develops an integration of Stages One and Two. Section 4 deals with two problems of the final stage: the failure to intergrate the plans for EMU within the international monetary order and provides insufficient microeconomic incentives to safeguard the target of price stability.