Edited by Klaus Liebscher, Josef Christl, Peter Mooslechner and Doris Ritzberger-Grünwald
Chapter 14: EU enlargement and monetary integration - the next steps: ERM II and beyond
14. EU enlargement and monetary integration – the next steps: ERM II and beyond Peter Mooslechner Monetary integration has been one of the main dimensions of European economic integration since World War II. Initial ideas and attempts to establish closer monetary cooperation were emerging in the 1960s, if not before. As early as in 1971 the Werner plan – based on political decisions agreed on in The Hague in 1969 – presented a detailed proposal for a monetary union, including the ﬁnal step of a common currency for Europe. The basic vision of working towards a monetary union in Europe was the idea to create a zone of monetary stability and, most of all, exchange rate stability. In particular following the break-down of the Bretton Woods system in the early 1970s the question of how to cope with the challenges of international monetary and ﬁnancial instability led to a number of important European initiatives, although they turned out to be mainly short-lived in the end: the ‘snake’ and the creation of a European Monetary System (EMS) in 1979 are two examples in this respect. In the end, the repeated attempts to establish a monetary framework in Europe as a prerequisite for further economic and political integration developed into a system of several European countries following an exchange rate peg strategy vis-à-vis the Deutsche mark. Given its rather high degree of openness and given the importance of Germany as its by far most important trading partner, Austria – even though not a member of...
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