The European Monetary System Money and Markets, and Lessons Regarding Transition
The initial moves that established the European Monetary System in 1979 were formidable enough, but pale by comparison with the enormity of the steps called for in the Delors Report of 1989 to achieve a common currency, a EuroFed, and a zero-inflation rate for EMS Member countries. That elected politicians would later at Maastricht endorse a treaty committing to the move toward one money and a common market is even more beyond ordinary belief, even though some may have seen the prospects differently from others and the Germans may have assured themselves that careful scrutiny of the matters at stake would favor their highly successful Bundesbank. Whatever these refinements, the Report and the actions at Maastricht raised the visibility of the undertakings regarding a new central bank and called attention to the need for greater understanding of a super-national money, as will be pointed out. Taking the matters set on track overall, there are lessons to be learned from the conflicts at hand, including lessons that may be used by societies seeking market econonmies that require monetary arrangements of the sort discussed in regard to the EMS and transition to a condition I call "one money and a common market."1
This chapter concludes the book by way of a review of central banking and the European developments. There is a sketch of the plan and prospects that appeared to be on track as a result of the Maastricht treaty, a review of the sovereignty issue, an outline of an alternative to the Delors Report and the Maastricht treaty approach, and an assessment of the foregoing with respect to the lessons to be learned.