The politics of monetary integration in the European Community: Theory, practice and prospects.

The aim of this thesis is to reappraise the European Community's progress towards Economic and Monetary Union (EMU) and to set out the lessons which can be derived from this experience and from economic and political theory with regard to the kind of strategy which must be followed to achieve EMU in Europe. It compares the three monetary systems, Bretton Woods, the Snake and the EMS, which account for the development of European monetary relations in the post-war period and tries to explore the parallels and their respective strengths and weaknesses, to draw conclusions as to the conditions which are necessary for the successful operation of an adjustable-peg type of exchange rate system and to assess the chances of such a system to achieve full and permanent EMU in the Community. It looks into the economic and the political factors which account for the successes and failures so far, their relevance today, as well as some of the interconnections that exist between EMU and integration in other fields. The thesis concludes that the EEC has as yet failed to make the decisive break towards monetary union because the full implications of EMU and the commitment necessary to achieve it have not been understood or accepted by Europe's national governments. The co-ordination approach to EMU, which has underpinned the Community's efforts in this direction from the early 1960s to the recent Delors proposals has been an inappropriate one for the task. The best way to achieve EMU in the Community, especially given the dramatic developments in Eastern Europe, is through the creation of a European parallel currency which would depoliticise monetary policy and would allow EMU to be implemented at a pace dictated by Europe's need for it, rather than by the twists and turns of national politics. Finally, the firm belief is stated that true EMU can only be realised within the framework of a federal Europe.