An increasing role for the ECU: a character in search of a script

Abstract

It is difficult not to begin a paper on the growing use and future prospects of the European Currency Unit (ECU) by placing the ECU in the perspective of the European Monetary System. In the resolution of the European Council of December 5, 1978 establishing the EMS, the purpose of the scheme was the’creation of closer monetary co-operation leading to a zone of monetary stability in Europe’.

Article Note

This paper is an offshoot of ongoing work on the role and prospects of the ECU conducted by the Committee of Alternates of the EEC Central Banks, under mandate of the Governors. However, the views expressed here are the author’s alone and do not represent the official views of the Banca d’ltalia. The author wishes to acknowledge the benefit of the discussions held in the Committee of Alternates, under the Chairmanship of Dr. A. Szasz in 1985 and of Mr. A. Loehnis in 1986. The work of the Alternates could count on excellent ad hoc reports prepared by the two groups of foreign exchange and monetary experts chaired, respectively, by Mr. H. Dalgaard and by Mr. R. Raymond. The author has also benefited from the exchange of views with many colleagues at the Banca d’ltalia, in particular E. Barone, G. Falchi, S. Rebecchini and A. Rinaldi. A preliminary version of this paper was presented at the ’Conference on the ECU market: current developments and future prospects’, New York University, January 30–31,1986.1 have greatly benefited from the comments of the discussant, Dr. A. Sommariva. As always, the responsibility for any remaining errors is solely my own.