EMU is Urgently Necessary, and Feasible

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The author begins by questioning the decision to favour, come what may, the «political» as opposed to the «technocratic» path to European Union. He argues that EMU is justified mainly by considerations of political economy, and outlines a possible strategy for its building. «A hard core» of countries – most likely the majority – capable of loosely meeting the convergence criteria contained in the Treaty of Maastricht by the 1997 deadline should set up EMU in 1997 itself or, as the Treaty envisages, no later than 1999. This option would be economically and politically opportune. At the established deadline, the exchange rates of the currencies of the countries concerned would be irrevocably frozen and their management entrusted to the European Central Bank. Then, after a brief adjustment phase, the single European currency would be issued. If this strategy were adopted, Antonio Martino's criticism of the excessive incrementalism of the EMU procedure envisaged in the Treaty of Maastricht would become irrelevant. The success of the strategy proposed would depend to a large extent on the credibility of the ECB. The provisions of the Treaty – which ought to be developed into a veritable «European Monetary Constitution» – would appear to offer ample guarantees in this respect.