IDEAS home Printed from
   My bibliography  Save this paper

Reinforcing Stage Two in the EMU Process


  • Niels Thygesen


The paper initially discusses monetary policies in the context of the wide margins introduced on 1 August 1993. The new President of the European Monetary Institute (EMI) has suggested that a number of stringent non-monetary conditions must be met before there can be a return to narrow margins. While this list may be too comprehensive, the paper argues that there are also some monetary prerequisites which will be difficult to meet: at a minimum some mixture of less conditionality in interventions on behalf of creditor central banks and strong incentives for debtor central banks to raise interest rates to defend their currencies. The paper finds a continuation of wide margins for most of the transition realistic. Such a scenario might have certain advantages in relation to the transition to monetary union, provided participants continue to value exchange rate stability highly. In the second part the specific role of the EMI is reviewed. To the extent that the EMI President, the Director-General and other senior members of the staff succeed in taking charge of the work in the Council, The Alternates' Committee and the various writing groups monetary coordination and the preparations for full monetary union should be enhanced. The latter would also be helped if the EMI were to be given some operational functions beyond the passive holding and managing of internaitonal reserves specifically mentioned in the Treaty. An operational role also in domestic money market operations and in clearing in the ecu market appears desirable.

Suggested Citation

  • Niels Thygesen, "undated". "Reinforcing Stage Two in the EMU Process," EPRU Working Paper Series 94-01, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  • Handle: RePEc:kud:epruwp:94-01

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Atkinson, A B & Sandmo, A, 1980. "Welfare Implications of the Taxation of Savings," Economic Journal, Royal Economic Society, vol. 90(359), pages 529-549, September.
    2. Nerlove, Marc & Razin, Assaf & Sadka, Efraim & von Weizsacker, Robert K., 1993. "Comprehensive income taxation, investments in human and physical capital, and productivity," Journal of Public Economics, Elsevier, vol. 50(3), pages 397-406, March.
    3. Lockwood, Ben & Manning, Alan, 1993. "Wage setting and the tax system theory and evidence for the United Kingdom," Journal of Public Economics, Elsevier, vol. 52(1), pages 1-29, August.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kud:epruwp:94-01. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.