CFA Safe under EMU

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What effect will the EMU have on the CFA zone? Main Siddiqi has the answers.

The creation of the EMU is scheduled to begin on 1 January 1999. This will be a milestone in the process of European Union integration and will herald the introduction of a single currency, the euro. France, a core EU member, is expected to satisfy the Maastricht treaty's criteria and be among the initial members joining the new euro zone. What implications does this have for the CFA franc?

France recently confirmed its intention of preserving the existing mechanisms of the CFA franc zone into the post-EMU era. This includes, most importantly, the French treasury's guaranteed convertibility of the unit, without interference from its EU members. Since 1948, the principle …