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Stage Two: Feasible Transitions to EMU


  • Artis, Michael J


This paper addresses the issue of the transition from Stage Two of EMU to Stage Three. The criteria established in the Maastricht Treaty for this transition include an ERM qualification. Under this criterion a participating country would have had to maintain its position in the normal bands of the ERM for a period of not less than two years. The accepted interpretation of `normal' has been `narrow' (2.25%). The speculative crises of 1992 and 1993 and their resolution in the form of the present `broad-bands' ERM complicate the problem of satisfying this criterion. The paper asks whether the criterion on its accepted interpretation is well-founded and, if so, what policies would need to be pursued, in the light of recent experience, in order to satisfy it. A critical part of the conclusion is that the EMI must be given, by agreement, greater powers of decision and recommendation than currently envisaged.

Suggested Citation

  • Artis, Michael J, 1994. "Stage Two: Feasible Transitions to EMU," CEPR Discussion Papers 928, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:928

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    Cited by:

    1. Clas Wihlborg, 1994. "EMU—Economic Substance or Political Symbolism?," The World Economy, Wiley Blackwell, vol. 17(5), pages 651-661, September.
    2. David Cobham, 1996. "Causes and Effects of the European Monetary Crises of 1992-93," Journal of Common Market Studies, Wiley Blackwell, vol. 34(4), pages 585-604, December.

    More about this item


    EMU; ERM; Exchange Rates; Intervention; Speculative Attack;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration


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