IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Reinforcing Stage Two in the EMU Process

Listed author(s):
  • Niels Thygesen
Registered author(s):

    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.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 94-01.

    in new window

    Date of creation:
    Handle: RePEc:kud:epruwp:94-01
    Contact details of provider: Postal:
    Ă˜ster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark

    Phone: (+45) 3532 4411
    Fax: +45 35 32 30 00
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    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)

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.