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Mooslechner, Peter --- "EU enlargement and monetary integration - the next steps: ERM II and beyond" [2004] ELECD 159; in Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris (eds), "The Economic Potential of a Larger Europe" (Edward Elgar Publishing, 2004)

Book Title: The Economic Potential of a Larger Europe

Editor(s): Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843769620

Section: Chapter 14

Section Title: EU enlargement and monetary integration - the next steps: ERM II and beyond

Author(s): Mooslechner, Peter

Number of pages: 15

Extract:

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 mon-
etary 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 ...