The single monetary policy of the EU
- The 1971 Resolution
- European Monetary System
- The stages of EMU
- The euro and its supervising authorities
The Treaty of Rome did not provide for the monetary organisation of the Community because that Treaty aimed at the realisation of the first two stages of European integration: the customs union and the common. Moreover, at the time of drafting the EEC Treaty an international monetary organisation existed, namely the Bretton Woods system, which ensured the convertibility of all the currencies of the Western World at fixed parities. This system warranted monetary stability, which is indispensable in a common market.
It was just at the time when the Bretton Woods system collapsed, in early 1971, that the Member States of the Community began their effort to organise their monetary affairs in an economic and monetary union. Acting on a proposal from the Commission based on the "Werner Report", the Council and the Representatives of the Governments of the Member States expressed in a resolution their political will to establish economic and monetary union in accordance with a phased plan beginning retroactively on 1 January 1971. At the conclusion of that process the Community was to have constituted a single currency area within the international system, possessing such powers and responsibilities in economic and monetary matters as would enable its institutions to administer the union.
With hindsight, that initial effort looks like a headlong rush without sound foundations, as it was not based on a real common market. However, that initial effort enabled the Members States to acquire precious experience and devise instruments and mechanisms that were, in 1979, transferred to the European Monetary System (which tried with variable success to stabilise the exchange rates of the common market countries), have been improved over time and were used for the second effort at establishing an economic and monetary union in the 1990s. This second effort had a better foothold than the first. The common market stage had been completed [see section 6.1], the Member States had developed closer links through common policies and had engaged themselves in the Maastricht Treaty to advance to the stage of economic and monetary union.