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The Transition to European Monetary Union Alberto Giovannini Essays in International Finance No. 178
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| This essay describes a plan for monetary transition that both challenges and expands upon the conclusions of the Delors Report prepared in 1989 by the Committee for the Study of Economic and Monetary Union. It identifies the conditions that must be met to ensure stability of the European Monetary System during transition and to achieve agreement within the European Community regarding the role of the European System of Central Banks in harmonizing national and Community monetary and exchange-rate policies. It maintains that the Delors plan for gradual monetary union is unlikely to deliver the convergence of expectations envisioned by its drafters and that monetary convergence will not occur without substantial effort to increase the credibility of the plan—for this reason, an accelerated move toward union might be more successful. It also finds that a single currency is the necessary end point of union and that a single currency is best achieved by a monetary reform. |
