IDEAS home Printed from https://ideas.repec.org/p/nsr/niesrd/218.html
   My bibliography  Save this paper

A Common Currency Route to EMU: The Hard ECU Revisited

Author

Abstract

In the event that the Maastricht approach to monetary union breaks down, which could happen for a variety of economic and political reasons, EU governments will be under pressure to find a convincing alternative route to monetary union. A viable way forward could be found by reviving the ideas for a common currency embraced by the UK Government in 1990. That approach involved the introduction of a new currency for Europe known as the "Hard Ecu", which would be as strong as the strongest existing EC currency by virtue of its "no-devaluation" guarantee, implemented through the narrow-band Exchange Rate Mechanism then in force. In the event, the Hard Ecu scheme was rejected, although not for the best of reasons. Although with hindsight it can be seen that the scheme contained flaws, these could be remedied in the light of subsequent experience. In particular, the "no-devaluation" guarantee should be replaced by putting the Hard Ecu on a consumer commodity standard. The ECB should then be set up to issue the Hard Ecu/Euro to circulate alongside national currencies and eventually replace them. This would mean adandoning the convergence criteria and "irrevocable locking" of exchange rates, but much of the institutional framework of Stage 3 could be retained. A redesigned common-currency approach would offer a more credible and less accident-prone route to EMU than the Maastricht approach.

Suggested Citation

  • Christopher Taylor, 1997. "A Common Currency Route to EMU: The Hard ECU Revisited," National Institute of Economic and Social Research (NIESR) Discussion Papers 119, National Institute of Economic and Social Research.
  • Handle: RePEc:nsr:niesrd:218
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rosaria Rita Canale & Pasquale Foresti & Ugo Marani & Oreste Napolitano, 2008. "On keynesian effects of (apparent) non-keynesian fiscal policies," Politica economica, Società editrice il Mulino, issue 1, pages 5-46.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    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:nsr:niesrd:218. 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: (Library & Information Manager). General contact details of provider: http://edirc.repec.org/data/niesruk.html .

    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.