Trade Liberalisation and Monetary Integration



The process of monetary integration can be regarded as the continual movement of the E.E.C. countries towards full convertibility within the Common Market, and eventually towards a common currency within a United States of Europe. The ultimate objective of the E.P.U. was to create those conditions in Europe which were required to restore limited convertibility. This limited convertibility took the form of partial convertibility in relation to current account transactions. Non-resident holders of a currency were given the right to sell that currency for any other currency. This was sufficient to promote multilateral trading in Europe without the need of the E.P.U. However, complete convertibility for current transactions means much more than simply extending this right to non-resident holders of a currency. It means the complete freedom of residents and non-residents to buy or sell any currency within the Community for the purpose of current account trading.1 This was the next stage of monetary integration in the Community. To achieve this the absolute freedom of intra-Community trade and payments in current transactions was required.


Member Country Trade Liberalisation Quantitative Restriction European Economic Community Trade Restriction 
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© Peter Coffey and John R. Presley 1971

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