Monetary Integration in Europe: Introduction

Before undertaking the essential synthesis of the assembled contributions on European monetary integration, it seemed necessary, in the light of recent developments, to introduce this special number by a brief commentary on the conditions for the realisation of a viable monetary union. On the eve of the symbolic date of “Europe 1992”, the monetary events of September 1992 are a timely reminder that a “Community of currencies”, which by suppressing the final source of national divisions will bring about the single market, requires the strict respect of the preconditions. However, the latter appear to be far from being secure; an opinion apparently shared by the markets whose recent somersaults have illuminated two essential principles. Firstly, the necessity for the convergence of economic performances and policies as an anchor for monetary union; and secondly, the validity of the “incompatibility theory”. The latter referring to the unstable character of a European Monetary System (EMS) based on: perfect capital mobility; fixed exchange rates; and the absence of tangible progress on monetary cooperation or a firm political engagement towards Economic and Monetary Union (EMU), such as the faultless ratification of the Treaty of Maastricht.