The Early Modern History of European Monetary Integration

Abstract

Late in 1990 an intergovernmental conference of the European Community began to consider the steps necessary to achieve a single currency for Europe. Agreement at Maastricht in December 1991 followed, with new treaty language on economic and monetary union, and completion of much of the transition to such an end by the beginning of 1999. Even at that time, prior to final treaty ratification and what would eventually happen in transition, Europe had moved on to a higher plane of economic and political integration, closer to a United States of Europe, than would have seemed imaginable only two decades earlier. Yet, imagined it was, for it was in the Werner Report of 1970 that the concept of economic and monetary union (EMU) for Europe received its clearest definition as an ideal, that is, as a method to achieve political integration. This chapter examines what might be termed the early modern history of the movement toward monetary integration in Europe, from the Treaty of Rome (1957) through the experience with the exchange-rate system called the snake. Several conclusions follow from this past experience to help one understand the nature of this central form of economic integration.