The Transition from the Exchange-Rate Mechanism to European Monetary Union

Abstract

In contrast to the efforts towards European monetary integration in the early 1970s, which emphasised economic and monetary union and treated exchange-rate arrangements merely as part of the transitional technical apparatus, the Council decisions which established the EMS did not even mention EMU. While it was no doubt still at the back of the minds of many of the authors of the EMS, and was the explicit objective idealised by Roy Jenkins in the Florence speech that sparked the processes that were to launch the EMS, little was written officially about EMU at that time. This can be attributed to the difficulties that the efforts towards it suffered in the early years, and the lack of credibility that they left behind. By the late 1970s, EMU was on a back burner, kept barely warm. The survival of the EMS itself was in some doubt until the mid-1980s.