Pierre Werner and monetary Europe (1957-2002)
A Brief Chronology
Signing of the Treaty of Rome:
- Article 67 lays down that the ‘Member States shall progressively abolish between themselves all restrictions on the movement of capital’.
- Article 105 provides for the setting up of a Monetary Committee with advisory status to promote the coordination of monetary
- Article 107 lays down that each Member State shall treat its policy with regard to rates of exchange as a matter of common
Ten European countries restore the convertibility of their currencies as laid down in Article VIII of the Articles of Agreement of the IMF.
The European Payments Union (EPU) (set up in 1948) is replaced by the European Monetary Agreement (EMA), establishing a special European margin of fluctuation against the US dollar (± 0.75 % instead of ± 1 %) under the Bretton Woods agreements.
Lecture on ‘The meanings of monetary integration’ delivered in Strasbourg by Pierre Werner, President of the Government of Luxembourg, Minister for Finance. The main points of his theory — based on the lessons learned from experience of the Benelux (‘an economic union without a currency, but harking back to a monetary agreement of 1943’) were as follows:
- ‘economic cooperation and integration are more directly achieved through the use of the monetary instrument’; ‘monetary rapprochement between sovereign countries can only be gradual and concomitant with the rapprochement of economic policies; the adoption of a single currency occurs at the end rather than the beginning of the process of integration’;
- ‘a common market among sovereign countries presupposes not only a financial order within the community but a financial order on a wider international, continental or global scale’. As for the ‘financial area of the Six’, it is not enough for it ‘to be incorporated into a wider monetary system’, but ‘their financial policies must be given a more marked Community orientation’.
Proposal: ‘The progressive implementation of a European currency of account’ capable of reducing the risks posed by speculative movements of capital associated with currency devaluations and/or revaluations.‘an accounting currency in the EEC’s international relations, by supplying a standard of value unaffected by ups and downs in individual countries, would facilitate the expansion of international trade and encourage further saving’.
- What to call this currency? ‘Euror’ — a name imbued with meaning;
- ‘It will be possible to extend the use of this unit (or of another one, to be defined) and it need not necessarily be done by revising the treaties’.
The Action Committee for the United States of Europe (ACUSE) chaired by Jean Monnet, calls for the setting up of a European Union of the monetary reserves of the six Member States of the EEC, as the prelude to a common monetary policy and a common European currency.
Marjolin Report — Commission Memorandum defining monetary union as the third stage of unification. The report suggests that ‘there needs to be a single currency, to ensure the success of the Common Market’.
‘Problems with the financial integration of Europe’ – A talk is given in Brussels by Pierre Werner, President of the Government of Luxembourg, Minister for Finance, to the members of the Association des amitiés belgo-luxembourgeoises and the Cercle royal gaulois. Werner sets out his ideas on ‘the monetary integration of the Six’:
- restating his public proposal of 1960 for a European currency of account, ‘the start of a European monetary system’;
- stressing the need for ‘fixed exchange rates’ and monetary discipline and solidarity, in the specific institutional framework of a ‘Monetary Institute’;
- pointing out that ‘the method thus recommended would make it possible for monetary integration to follow the same course of development as the tasks of the Community …’, as ‘economic policies will never be made absolutely uniform; at particular times, it may be necessary to take short-term action in one or other country’.
EEC Council Decision setting up the Committee of Governors of the Central Banks of the Member States of the EEC.
EEC Council Decision on cooperation between Member States in the field of international monetary relations.
‘The foreign policy of the Grand Duchy of Luxembourg’ — Speech by Pierre Werner, Minister of State, President of the Government of Luxembourg, Minister for Foreign Affairs, Minister for the Treasury, Minister for Justice, before the Chamber of Deputies of the Grand Duchy of Luxembourg. Referring to relations between the Six, Werner calls for recognition of the need ‘to establish as soon as possible the foundations for tighter monetary cooperation’ in order to safeguard the Common Market ‘from uncoordinated financial and monetary operations’.
Address on European monetary policy — Lecture given in Brussels by Pierre Werner, President of the Government of Luxembourg, Minister for the Treasury, at the invitation of the American and Common Market Club.
Speech by Pierre Werner, President of the Government of Luxembourg, Minister for the Treasury, at the 20th Benelux Economic Congress. Werner reaffirms:
- the idea of setting up a European currency of account which will lead to the strengthening of monetary solidarity among the Member States. Such a currency will, among other things, have the virtue of ‘resolving the problem of fixed exchange rates’;
- ‘the need for solidarity of action in a field which is still dominated by a very strong sense of national identity’;
- ‘the requirement to tighten up monetary discipline still further between countries so closely associated in the pursuit of their economic objectives as the Common Market countries’.
‘Prospects for European financial and monetary policy’ — Address given in Saarbrücken by Pierre Werner, President of the Government of Luxembourg, Minister for the Treasury, to the CDU economic congress. While referring to the prospects for European financial and monetary policy in an increasingly unpredictable international context, Werner puts forward ‘a five-point action plan’ for European monetary integration based on the creation of a European unit of account, consultation, fixed exchange rates between European currencies, and solidarity — internal and external.
‘Benelux and the prospects for European financial policy’ — Address given in The Hague by Pierre Werner, President of the Government of Luxembourg, Minister for the Treasury, before the Benelux Committee. In his speech, Werner returns to the ‘five-point action plan’ released at the beginning of the year, the success of which (guaranteeing stable financial relations between the Member States) would be guaranteed by ‘making commitments similar to those made in the Benelux framework’ (thereby proving their viability). ‘We cannot make alterations to exchange rates except by common agreement.’
‘Reform of the international monetary system’ — Article by Pierre Werner in Academia — Nouvelle Revue Luxembourgeoise, (1)1968.
At a meeting of the Ministers for Finance of the EC Member States in Rotterdam, Pierre Werner, President of the Government of Luxembourg, Minister for the Treasury, once again sets out his ‘five-point action plan’, which he defends and discusses in detail in his official speech to his colleagues from the other Member States.
First Barre Plan (Raymond Barre — Vice President of the Commission of the EC with responsibility for economic affairs). The Commission of the EC submits to the EC Council of Ministers a memorandum on ‘appropriate policy in the Community on current economic and monetary problems’, recommending an alignment of economic policies and the establishment of the machinery for short-term monetary support (STMS).
Memorandum from the Commission of the EC to the EC Council of Ministers: Requirement for, and procedures for, action in the field of capital (in the context of a ‘common market’).
‘European monetary prospects’ — Lecture by Pierre Werner, President of the Government of Luxembourg, Minister for the Treasury, to the Belgian Royal Institute for International Relations.
1st and 2nd December
The Hague Conference. The Heads of State agree ‘to take all necessary steps to achieve economic and monetary integration’. The summit of the ‘Six’ decides to set up a group of experts to investigate ways of making progress towards economic and monetary union by stages.
Agreement between the central banks of the Six Member States of the EC on short-term monetary support (STMS).
The Belgian Plan (the Snoy Plan)— At the instigation of the Finance Minister Jean-Charles Snoy et d’Oppuers, Belgium puts forward its proposals on ways of making progress towards economic and monetary union by stages.
The Luxembourg Plan — The Grand Duchy of Luxembourg puts forward its proposals on ways of making progress towards economic and monetary union by stages. The Luxembourg Plan incorporates in full — with a number of updates — the remarks made by Pierre Werner, President of the Government, Minister for the Treasury, in his public statement of January 1968.
The German plan (the Schiller Plan) — At the instigation of the Minister for Economic Affairs Karl Schiller, Germany puts forward its proposals on ways of making progress towards economic and monetary union by stages.
‘Europe moves towards monetary union’ — New version of the paper drawn up by Pierre Werner and published as ‘Prospects for European financial and monetary policy’ in January 1968.
Pierre Werner took office as Chairman of the ‘group of experts responsible for investigating ways of making progress towards economic and monetary union by stages’ (the Werner Committee).
Étienne Davignon is instructed to investigate ways of taking more effective concerted action in the foreign policy field.
The second Barre Plan. The Commission of the EC submits to the EC Council of Ministers a memorandum putting forward a plan for the establishment of an economic and monetary union in three stages, with a timetable for the period from 1970 to 1978.
The Werner Committee started its work in Luxembourg.
The Group consists of the President of the Committee of Governors of the Central Banks (Baron Hubert Ansiaux from Belgium), the Chairman of the Anti-Cyclical Policy Committee (Gerard Brouwers of the Netherlands), the Chairman of the Monetary Committee (Bernard Clappier of France), the Director-General of Economic and Financial Affairs of the EEC (Ugo Mosca of Italy), the Chairman of the Medium-Term Economic Policy Committee (Johann-Baptist. Schöllhorn from Germany) and the Chairman of the Budgetary Policy Committee (Gaetano Stammati from Italy).
The Interim Report from the Werner Committee. Between 20 March and 29 May 1970, the Werner Committee meets five times.
The EC Ecofin Council approves the Interim Report and gives the go-ahead for deepening the reflection of the Werner Committee. A final report will be drawn up a few month later.
Ansiaux Report on the margins of exchange rate fluctuation between European currencies.
The Economic Affairs Committee of the European Parliament (EP) debates on the ‘Interim Report from the Werner Committee’ on the attainment by stages of economic and monetary union (rapporteur Mr. Bousch).
Report on the attainment by stages of economic and monetary union. Official submission of the Werner Report
- The Werner Report gives priority to the coordination of economic policies, the need for common decision-making bodies, the centralizing of monetary policy through the establishment of a Committee of Governors of the Central Banks, the reduction of exchange rate variations as a first stage and the establishment of a European fund to support exchange At the end of three stages spread over ten years, the Plan speaks of setting up a common central bank and, possibly, the introduction of a single currency.
- The Werner Report proposes moving by seven stages over seven to ten years, the order in which the stages are taken being interchangeable depending on the particular economic and financial situation in the participating countries and actual developments in European and international
- The Werner Report, based on convertibility, fixed parities, convergence and coordination, has similarities of substance with the ‘five-point action plan’ which Pierre Werner published in 1967 on the basis of his earlier monetary ideas (1960).
It should be noted that the final objective set out in the Werner Report, having been put on ice following the world economic crisis of 1973, will come to fruition only 32 years later, with the introduction of euro coins and notes on 1 January 2002.
The Werner Report is officially delivered to the Commission of the EC and to the EC Council of Ministers.
The correspondence carried by the Agence internationale d’information pour la presse on 15 October 1970 mentioned that ‘in circles close to the Commission, no judgment is being expressed as to the substance, since responsibility for the document lies with the Werner Committee, which drew it up. It is felt, however, that a number of somewhat unenthusiastic, not to say negative, reactions that have been heard in this or that capital with regard to different aspects — a fear of over-hasty institutionalization, doubts as to the effectiveness of coordinating economic policies or the advisability of reducing exchange rate fluctuations — are due to partial familiarity with the document. Only in the next few days, when the content of the document is known in detail, will it be possible to gauge its importance and only then will the political options stand out more clearly.’
The EC’s Medium-Term Economic Policy Committee meeting in Brussels, with Walter Schölhorn in the chair, adopts the preliminary draft of the EEC’s third medium-term economic policy programme, covering the period 1971–75. This programme is closely linked to the Werner Report, it being now agreed that the ‘plan by stages’ must be based on comprehensive quantitative guidelines which are valid for the whole of the Community and relate to the main features of economic development.
The Economic Affairs Committee of the EP adopts a draft report on the ‘Interim Report from the Werner Committee’ concerning the attainment by stages of economic and monetary union.
The Werner Report is presented during the Council of Foreign Affairs Ministers of the EC held in Luxembourg. Pierre Werner, chairman of the Werner Committee and also host of the Council meeting, makes an explanatory statement.
The EC Council discusses the Werner Report.
On the basis of the Werner Report, the Commission of the EC makes a Communication and proposals on the stage-by-stage implementation of economic and monetary union.
Lecture-cum-debate on the Werner Report at the EP, for the heads of Christian- Democratic party groups, with Pierre Werner as guest.
Part-session of the EP — Exchange of views between the EP, the EC Council and the Commission of the EC on economic union and the prospects for a monetary union in the Community — stage-by-stage implementation of the economic and monetary union of the Community (debate on the Werner Report).
The Economic Affairs Committee of the EP adopts a draft supplementary report on the Werner Report (rapporteur Mr.Bousch).
Part-session of the EP — Debate on the attainment by stages of the economic and monetary union of the Community (the Werner Report). Adoption, by unanimous vote, of the draft resolution on the Werner Report tabled by the Economic Affairs Committee.
The European Council approves the Werner Report.
Resolution of the EC Council and of the Representatives of the Governments of the Member States on the stage-by-stage implementation of economic and monetary union .
The Council adopts three decisions:
- Medium-term financial assistance (MTFA);
- Strengthening of the coordination of short-term economic policies;
- Strengthening of cooperation between the central
Following the unilateral decision of the United States President Richard Nixon that ended US dollar convertibility into gold, the fixed exchange rate system set up at Bretton Woods come to an end. Currencies are left to float.
Resolution of the EC Council and of the Representatives of the Governments of the Member States laying down the outlines for a European exchange system, the future ‘monetary snake’, with margins of fluctuation of ± 2.25 % (as against the US dollar).
Basel Agreement between the central banks of the Member States of the Common Market (Banque de France, Deutsche Bundesbank, Banca d’Italia, Nederlandsche Bank, Banque Nationale de Belgique) and the candidate countries (Bank of England, Central Bank of Ireland, Norges Bank and Danmarks Nationalbank) stipulating that the spread between the exchange rates for any two EEC currencies at a given time must not exceed 2.25 %, or half the authorised margin between any one of these currencies and the dollar (4.5 %, ‘the tunnel’).This is the ‘snake’ in the ‘tunnel’. This margin-shrinking mechanism entered into force on 24 April 1972.
The pound sterling leaves the ‘monetary snake’.
EC Council Decision on the ‘multilateralization of positions and regulations resulting from operations, consultation between central banks, very short-term financing (VSTF)’.
Paris Summit of the Heads of State of the (enlarged) Community concerning progress on a monetary Europe and providing for the creation of the European Monetary Cooperation Fund (EMCF), as stipulated by the Werner Report.
Denmark, the United Kingdom and Ireland join the EC.
The joint floating of six EC Member States currencies (Germany, France, Denmark and the Benelux countries) is confirmed. This is the ‘snake in the tunnel’, no longer supported by the US dollar.
Norway and Sweden join the ‘monetary snake’.
EC Council Regulation setting up a European Monetary Cooperation Fund (EMCF), which begins operating on 1 June 1973.
The French franc leaves the ‘snake’. It will join it again from 10 July 1975 to 15 March 1976.
EC Council Regulation setting up loans.
EC Council Decision on the European unit of account (EUA) creating a basket of currencies on the basis of ‘quantities’ (applied to the EMCF by the EC Council Regulation of 18 December 1978).
Belgium and the Netherlands give up their special 1.5 % margin of fluctuation of their currencies (dating back to 1971).
‘Exploring the conditions for relaunching economic and monetary union in the European Economic Community’ — Report by Pierre Werner, Honorary President of the Luxembourg Government, to the symposium on ‘Economic union and the problem of the European currency’ organized in Rome by the Union of European Federalists.
‘Europe’s Present Challenge and Future Opportunity — Jean Monnet Lecture’. Speech by Roy Jenkins, President of the European Commission, delivered at the European Studies Institute in Florence and regarded as ‘relaunching a monetary Europe’.
Communication of the Commission of the EC to the Council on the prospect of economic and monetary union.
Copenhagen European Council: the nine EC Member States reach agreement in principle on establishing a monetary stability zone in Europe.
Bremen European Council: agreement on the main lines of a European monetary system. Valéry Giscard d’Estaing (France) and Helmut Schmidt (Germany) propose setting up the monetary system to replace the ‘monetary snake’.
Resolution of the European Council (known as the ‘Brussels Resolution’) setting up the European Monetary System (EMS) and creating the European Currency Unit (the official ECU). Parity: 1 official ECU = 1 EUA. It was decided that the European Monetary System (EMS) is to enter into force on 13 March 1979.
Paris European Council: EMS scheduled to enter into force on 13 March 1979.
Agreement between the EC central banks on the operating procedures of the EMS (± 2.25 % for all currencies, except the Italian lira at ± 6 %).
The object of launching the EMS is to stop the EC Member States having to resort to using the exchange rate weapon against their European competitors. As soon as a currency approaches the limit set by the 2.25 % margin, the government concerned has to intervene on the money market to bring the exchange rate for its currency back within the fixed margins.
The EMS also gives birth to the ECU (the European Currency Unit), a unit of account which serves as a reference point for the national currencies.
Luxembourg adopts a law which, for the first time, coherently defines the Grand Duchy of Luxembourg’s own particular monetary status. The law is a response to the demands for national legislation on the country’s monetary status to be revised; this had become necessary following the international currency upheavals caused by the collapse of the Bretton Woods system.
Luxembourg adopts a grand-ducal regulation laying down, in Article 1, that ‘the exchange rate between the Luxembourg franc and the Belgian franc shall be one to one’.
The Deutschmark is revalued by 2 % and the Danish krone is devalued by 2.85 %.
The Danish krone is devalued by 4.76 %.
Strasbourg European Council decides that the move to the institutional phase of the EMS will be carried out ‘in due course’.
Greece becomes a member of the EEC.
Creation of the private ecu on the money markets . Parity: 1 ecu = 1 ECU.
The European Investment Bank (EIB) launch the first bonds denominated in ecus.
The Italian lira is devalued by 6 %.
The Deutschmark and the Dutch guilder are revalued by 5.5 %. The French franc and the Italian lira are devalued by 3 %.
The Belgian franc and the Luxembourg franc are devalued by 8.5 %. The Danish krone is devalued by 3 %.
Luxembourg: The Belgian Government’s decision to devalue the Belgian franc unilaterally seriously shakes Luxembourg’s leaders. Pierre Werner, President of the Government of Luxembourg, sees the decision as ‘an infringement of the principle of codecision enshrined in the Belgo-Luxembourgish monetary protocols’.
The Deutschmark and the Dutch guilder are revalued by 4.25 %. The French franc is devalued by 5.75 %. The Italian lira is devalued by 2.75 %.
Parities within the EMS are adjusted: Deutschmark revalued by 5.5 %, Dutch guilder revalued by 3.5 %, Danish krone revalued by 2.5 %, Belgian franc and Luxembourg franc revalued by 1.5 %, French franc and Italian lira devalued by 2.5 %, Irish pound devalued by 3.5 %. France decides not to leave the system.
Luxembourg: creation of the Luxembourg Monetary Institute (LMI) — the embryo of the future Luxembourg central bank — responsible, among other things, for issuing banknotes and coins and supervising the financial sector. With the Luxembourg Monetary Institute (LMI), the Grand Duchy was able to assert its monetary identity, but, most of all, to be on an equal footing with the other States in the EMS. Although it was not yet an independent central bank in the strict sense, the LMI had all the powers it needed to discharge all the functions of a central bank in the event that Luxembourg’s leaders decided to end the monetary union with Belgium.
Luxembourg: the LMI starts operating.
Five-yearly review of the weights of currencies in the ecu.
The Greek drachma joins the ecu.
Jacques Delors (France) is appointed President of the Commission of the EC in succession to Gaston Thorn (Luxembourg).
Greenland leaves the EC but retains associated status with it as an ‘overseas territory’.
Palermo: amendments to the agreement of 13 March 1979, strengthening the status of the ecu (mobilization, acceptance, remuneration, multiple holding).
Greece signs up to the agreement on the EMS.
Milan European Council. The Heads of State or Government decide by qualified majority to convene an intergovernmental conference to reform the Rome Treaties (the ‘Genscher-Colombo plan’).
The ministers and the governors of the central banks of the EC Member States decide to modify the central rates within the EMS.
The Deutschmark, the French franc, the Dutch guilder, the Danish krone, the Belgian franc, the Luxembourg franc and the Irish pound are revalued by 2 %; the Italian lira is devalued by 6 %.
Spain and Portugal join the EC.
17 and 28 February
Conference of the Representatives of the Governments of the EC Member States — Decision to draw up a Single European Act.(signed in Luxembourg on 17 February and The Hague on 28 February 1986), the Single European Act inserts into the Treaty of Rome a reference to the EMS experience, organising the ‘monetary capacity’ of Europe (Article 102A) and providing for the free movement of capital.
The Deutschmark is revalued by 3 % and the Belgian franc, the Luxembourg franc and the Danish krone by 1 %, and the French franc is devalued by 3 %.
The Irish pound is devalued by 8 %.
Capital movements: the EC Council adopts a directive, amending that of 11 May 1960, imposing additional obligations on the EC in respect of capital movements.
The Deutschmark and Dutch guilder are revalued by 3 % and the Belgian franc and Luxembourg franc by 2 %.
Spain joins the EMS.
The Single European Act enters into force.
The so-called ‘Basel-Nyborg’ agreement: approval by the informal EC Ecofin Council measures decided on at Basel by the central banks governors and amending the agreement of 13 March 1979 (setting up of a supervision procedure and broadening of the very short-term financing mechanism to the advantage of intra-marginal interventions).
France (the French Minister for Finance Edouard Balladur) submits a memorandum on ‘European monetary integration’ to the EC Ecofin Council.
Germany (the German Foreign Minister Hans-Dietrich Genscher) argues before the EP for the ‘creation of a monetary union and of a European central bank’.
Italy (the Minister for the Treasury Giuliano Amato) backs ‘the idea of a single currency’.
The EC Council Directive for the implementation of Article 67 of the Treaty of Rome for the deregulation of capital movements on 1 July 1990.
- Consolidation of medium-term financial assistance (MTFA) and Community loans in a single arrangement denominated ‘medium-term financial support’ (MTFS).
- Complete liberalisation of capital movements: the EC Council Directive for the implementation of Article 67 of the Treaty of Rome for the deregulation of capital movements on 1 July
Hanover European Council, following a proposal from Germany, mandates a committee of independent experts chaired by Jacques Delors with ‘the task of studying and proposing concrete stages leading towards economic and monetary union’ (the Delors Committee).
The Delors Committee submits its report on Economic and Monetary Union (EMU).
Taking its lead largely from the Werner Plan, the Delors Report proposes attaining EMU in three stages, though without setting a calendar.
- The first stage will be devoted to strengthening economic and monetary cooperation and getting the currencies of all the Member States to take part in the EMS.
- The second stage will involve harmonising monetary policies and setting up a European central
- The third stage fixes the exchange rates between the currencies irrevocably and brings in a single currency, the ecu, to take the place of the national currencies.
Informal EC Ecofin Council of S’Agaro: discussion and approval of the report from the Delors Committee for the study of EMU.
The peseta joins the EMS exchange rate mechanism (margin: 6 %).
Madrid European Council: the Council approves the Delors Committee’s report and decides to set the first stage in motion as from 1 July 1990. The final communiqué refers to the need to keep a balance between the social aspects and the economic aspects of the building of the Single Market.
Enlargement: the Republic of Austria applies to join the European Communities.
The peseta and the escudo are included in the ecu.
Strasbourg European Council:
- Convening of the intergovernmental conference on EMU for the end of
- The Heads of State or Government of the Member States adopt the Community Charter of the Fundamental Social Rights of
The Italian lira is devalued by 4 % and its margin of fluctuation within the SME is reduced from 6 % to 2.25 %.
It is decided to assign extra functions to the Committee of Governors of the Central Banks of the EC Members States
Dublin European Council decides to hold, in December 1990, two Inter-Governmental Conferences (IGCs) – one on EMU and the other on political union.
The EC Council lays down guidelines for the negotiation of an agreement with the EFTA countries with a view to the establishment of a European Economic Area (EEA).
Start of the first stage of EMU. The Capital Movements Directive enters into force. Monetary unification between the Federal Republic of Germany (FRG) and the German Democratic Republic (GDR) takes effect.
Enlargement: the Republic of Cyprus applies to join the European Communities.
Enlargement: the Republic of Malta applies to join the European Communities.
The Commission of the EC publishes its draft treaty on EMU.
German reunification: the EC Council adopts the provisional measures provided for in the framework of German reunification.
The German reunification: Process in which the German Democratic Republic (GDR) become part of the Federal Republic of Germany (FRG) to form the reunited nation of Germany. Berlin is reunited into a single city.
The pound sterling joins the EMS exchange rate mechanism (margin: 6 %).
Norway pegs its currency to the ecu with a margin of fluctuation of ± 2.25 %.
Rome European Council: 11 Member States announce that the second stage of EMU should start on 1 January 1994 and that a decision on moving on to the third stage should be taken before 1997. The UK rejects the very principle of a single currency.
Opening of the IGC on EMU.
The Commission of the EC adopts the Community support frameworks for structural investment in the five new German Länder and East Berlin.
Statement of principles regarding agreement prior to interventions in EC currencies.
Sweden pegs its currency to the ecu with a margin of fluctuation of ± 1.5 %.
Finland pegs its currency to the ecu with a margin of fluctuation of ± 3 %.
Enlargement: Sweden applies to join the EC.
The treaty providing for the introduction of EMU is adopted by the Heads of State or Government at the European Council meeting in Maastricht. The ‘Maastricht Treaty’ makes the move towards a single currency irreversible. The UK and Denmark secure the right not to take part in the single currency (the opt-out clause).
Signing of the Treaty on European Union (TEU) in Maastricht.
The Commission of the EC adopts proposals relating to the second package of structural and financial measures (Delors II Package).
Enlargement: Finland applies to join the EC.
The escudo joins the EMS exchange rate mechanism with a margin of fluctuation of 6 % (decision of 4 April).
Signing of the Agreement establishing the EEA.
Enlargement: Switzerland applies to join the EC.
First Danish referendum on ratification of the TEU, rejected by 50.7 %.
The Cyprus pound is pegged to the ecu with margins of fluctuation of ± 2.25 %.
The Luxembourg Parliament ratifies the TEU.
The Bank of Finland removes the limits on fluctuation of the markka and allows its currency to float.
The Italian lira is devalued by 7 %.
The peseta is devalued by 5 %, the pound sterling and Italian lira leave the EMS exchange rate system.
Referendum in France on ratification of the Maastricht Treaty: approved by 51.05 %.
Sweden unpegs the krona from the ecu and allows its currency to float.
The peseta and escudo are devalued by 6 %.
Norway officially applies to join the EC.
By referendum, the Swiss decide against ratification of the agreement relating to the EEA.
Norway unpegs the krone from the ecu.
Edinburgh European Council:
- approves ‘Delors II Package’;
- sets 1 January 1993 as the date for the opening of accession negotiations with Austria, Sweden and Finland;
- allows Denmark derogations which enable it to put the TEU to referendum
Entry into force of all the legislation required for the completion of the single market.
The Irish pound is devalued by 10 %.
Opening of accession negotiations with Austria, Sweden and Finland.
In Luxembourg, opening of accession negotiations with Norway.
The peseta is devalued by 8 % and the escudo by 6.5 %.
Second Danish referendum on ratifying the TEU including the special status for Denmark (56.8 % vote in favour).
Copenhagen European Council:
- Fixing of the criteria for accession to the European Union (EU) (the ‘Copenhagen criteria’);
- The Commission of the EC is instructed to draw up a white paper on a long-term strategy to promote competitiveness and employment;
- The EIB is asked to increase by 3 billion ecu the temporary loan mechanism decided upon by the Edinburgh Council;
- The EC Council confirms that Austria, Finland, Norway and Sweden will join the European Community as from 1 January 1995;
- Countries of Central and Eastern Europe that wish to join the European Community will have to meet the accession
The margins of fluctuation are widened to 15 % either way. The ministers and governors of central banks of the EC Member States reaffirm the validity of the current central parities.
The Brussels European Council:
- Adoption of a declaration on the entry into force of the TEU;
- The Council again states that the second stage of EMU will enter into force as from 1 January 1994.
- It is decided that the seat of the EMI, and therefore of the future ECB, will be
The TEU, signed in Maastricht on 7 February 1992, enters into force and the composition of the ecu is frozen.
The Council of the EU adopts the first set of decisions and regulations on the secondary legislation required for the second stage of EMU.
The European Commission adopts the White Paper on ‘Growth, Competitiveness, Employment: The Challenges and Ways Forward into the 21st Century’.
Entry into force of the second stage of EMU. Establishment of the EMI in Frankfurt with the task of setting up the future ECB. The EMI takes over from the EMCF.
Conclusion of accession negotiations with Austria, Finland, Norway and Sweden.
Hungary applies to join the EU.
The European Commission sets up a think tank on the implementation of the single currency, consisting of private-sector experts and consumers’ representatives (the ‘Maas Group’).
Poland applies to join the EU.
66.6 % of Austrians vote in favour in a referendum on accession to the EC.
Jacques Santer, President of the Government of Luxembourg, is appointed President of the European Commission at an extraordinary meeting of the Council in Brussels.
Free-trade agreements are signed with Estonia, Latvia and Lithuania.
52.2 % of Swedes vote in favour in a referendum on accession to the EU.
52.4 % of Norwegians vote ‘No’ in a referendum on accession to the EU.
Essen European Council approves the strategy of rapprochement with the countries of post- Communist Central Europe.
Austria, Finland and Sweden join the EU and the EMS. The act of accession of the three countries was signed in Corfu on 24 June 1994. Norway, which also signed, did not in the end ratify the agreement.
The Austrian schilling joins the exchange rate mechanism (ERM).
Following a vote of approval by the EP on 18 January, the representatives of the governments of the Member States of the EU appoint the President Jacques Santer, and the new Members of the European Commission for the period from 1995 to 2000.
The peseta is devalued by 7 % and the escudo by 3.5 %.
Publication of the Maas Report on preparations for the introduction of the single currency.
The European Commission submits to the German Government its draft Green Paper on the scenario for the move to a single currency.
The European Commission adopts the Green Paper on the single currency, containing the proposals on the scenario for the move to the single currency and the legal framework for it, and on the communication policy to be pursued.
Informal Ecofin Council in Valencia. The Finance Ministers of the Fifteen:
- reiterate their agreement on the calendar and the criteria for the introduction of the single currency;
- agree to the principle of the stability pact and the Commission’s scenario for the changeover;
- decide to drop the name ‘ECU’ for the single
The EMI releases its report on the ‘changeover to the single currency’.
Madrid European Council fixes the scenario for the practical steps and sets 1 January 1999 as the date for the changeover to Monetary Union (MU). The Council adopts ‘euro’ as the name for the European single currency.
Informal Ecofin Council in Verona: a clear majority of countries wants an agreement on exchange rates between the countries in and out of the system. The principle of a ‘stability pact’ is accepted. The name ‘cent’ is given to the hundredth part of a euro.
Florence European Council: the broad outlines of the new exchange rate mechanism will be set by a European Council resolution; the operational procedures will be defined once the ECB has been set up in 1998.
Informal EU Ecofin Council in Dublin: agreement on the procedure for adoption of the legal framework for the introduction of the euro.
The Finnish markka joins the ERM.
The Italian lira rejoins the ERM.
Dublin European Council.
- Adoption of the legal status of the euro, the agreements on ERM II (a new European exchange rate mechanism) and the ‘Stability and Growth Pact’ (SGP). The euro will replace the ECU 1 to
- Adoption of the agreement on the appointment of Wim Duisenberg (Netherlands) to head the EMI (though without prejudice to his appointment to head the ECB).
- Presentation by the EMI of the full range of banknotes in euros (Robert Kalina of Austria is the prizewinner in the competition to design the euro notes).
The EMI publishes the report on the regulatory, organisational and logistical framework for the single monetary policy in stage III.
Informal Ecofin Council in Noordwijk. Agreement on the technical procedures for the ‘Stability and Growth Pact’ and on ERM II. The calendar for the selection of the countries to adopt the euro on 1 January 1999 is clarified.
Ecofin Council in Luxembourg. France expresses reservations regarding the signing of the SGP in its present state and asks for strengthening of the ‘economic focus’.
Amsterdam European Council. Final adoption of the resolution on ERM II, the regulatory process for the SGP (France finally comes round to the Commission’s proposals), and the regulation containing the most urgent provisions regarding the legal status of the euro. The design for the shared side of the euro coins is approved. A resolution on ‘growth and employment’ is adopted.
Informal Ecofin Council in Mondorf. The irrevocable bilateral exchange rates of the currencies in the system will be announced in spring 1998. A start is also made on drawing up a code of good conduct in fiscal matters and on the coordination of economic policies.
Signing of the Amsterdam Treaty.
The British Chancellor of the Exchequer, Gordon Brown, officially announces that the UK will not take part in MU on 1 January 1999 and will therefore invoke the opt-out clause in the Maastricht Treaty. He also says that ‘it is essential that the Government and business prepare intensively during this Parliament, so that Britain will be in a position to join a single currency, should we wish to, early in the next Parliament.’
Luxembourg European Council. Euro notes and coins will be introduced on 1 January 2002. Council adopts a resolution on the coordination of economic policies (establishment of informal meetings of Finance Ministers of the countries in the system) and on Articles 109 (exchange rate policy) and 109B (dialogue between Council and ECB).
Eleven of the fifteen EC countries declare that they are willing and able to adopt the single currency. Greece does not meet the criteria, the UK and Denmark do not wish to join the single currency process and Sweden defers its decision on the question.
The Greek drachma joins the European ERM and the Irish pound is revalued by 3 %.
Publication of reports on convergence by the EMI and the Commission. The countries concerned are the Fifteen minus the UK, Denmark, Sweden and Greece.
Brussels Council (known as the ‘Jumbo Council’).
Ecofin Council recommendation regarding the list of countries joining MU on 1 January 1999.
- May: Opinion of the EP.
- May: European Council Decision on the list of countries: beginning of the ‘intermediate period’.
- May: advance notice of the bilateral parities of the currencies in the system; Council recommendation on the appointment of the members of the ECB
Appointment of the members of the ECB board by the European Council.
Inauguration of the ECB and the European System of Central Banks (ESCB). The EMI thereby ceases to exist.
Creation of the Central Bank of Luxembourg (at the same time as the ECB).
Cardiff European Council. First review of the national action plans for employment.
Informal Ecofin Council in Vienna. Advance notice of participation by Greece and Denmark in ERM II and of the margins of fluctuation for their currencies (15 % and 2.25 % respectively); report to the Council on the external representation of the MU.
Joint communiqué of the Council and the European Commission fixing the procedure for adoption of the conversion rates for the euro.
The ECB Council announces the interest rate for the first refinancing operation in euros, on 4 January (3 %).
The Council of the EU adopts the irrevocable conversion rates of the currencies in the system in euros, as proposed by the European Commission after consulting the ECB and the EP. The central rates in euros for the Greek drachma and the Danish krone are adopted.
31 December 1998–3 January 1999
Weekend changeover to the euro in the financial sector (money markets, payment systems).
The third stage of EMU enters into force with the establishment of Monetary Union and the creation of the euro (the currency of the countries participating in the MU, with the national currency units becoming subdivisions of the euro). The single monetary policy is defined and put into effect by the ESCB, and new government securities are issued in euros.
Cologne European Council: ‘macroeconomic dialogue’ is set up, involving, among others, the representatives of the Council of the EU, the European Commission, the ECB and the social partners, and encouraging economic policy coordination with a view to ensuring sustainable, non- inflationary growth.
Every two years from 1 January 1999 (or on the initiative of a country which is not yet a member of the MU), the competent EU authorities are to consider the position of countries which are not yet members of the MU in the light of the convergence criteria (apart from the UK and Denmark, which are not taking part in stage 3 of EMU).
Greek drachma revalued by 3.5 % under ERM II.
Extraordinary European Council in Lisbon. Overall strategy for the transition to a knowledge- based society and economy. Implementation (by 2005) of the action plan for financial services. Adoption of the objective of bringing the employment rate to 70 % by 2010.
Publication of the convergence reports for 2000 by the ECB and the European Commission.
Statement by the Eurogroup on the level of the euro, which does not reflect the economic fundamentals in the euro zone.
Feira European Council. Approval of the report on the ‘tax package’ (comprehensive report requested for the end of 2002).
G7 Decision. ‘At the initiative of the ECB, the monetary authorities of the US, Japan, UK and Canada joined with the ECB on Friday, September 22, in concerted intervention in exchange markets, because of the shared concern of Finance Ministers and Governors about the potential implications of recent movements in the euro for the world economy.’
Referendum in Denmark on accession to MU is rejected by 53.1 % of the population.
Greece joins the MU.
Signing of the Nice Treaty on the reform of the institutions with a view to enlargement (size and membership of the European Commission, weighting of voting rights in the Council of the EU, extension of qualified majority voting, relaxation of the procedures for recourse to enhanced cooperation, the ‘enabling clause’ for revising the voting rules in the Governing Council of the ECB).
Ireland refuses to ratify the Nice Treaty (53.87 % vote against in a referendum).
Beginning of the phase involving frontloading of credit establishments in the euro zone with euro notes and coins (actual date depends on the country).
Laeken Declaration on the future of the EU — The Convention on the Future of Europe is launched, with Valéry Giscard d’Estaing (France) chosen to chair its work, which is to culminate in a draft Constitution for Europe.
Euro notes and coins are introduced in the MU countries. All book payments have to be denominated in euros.
Luxembourg — Pursuant to the grand-ducal order, the Netherlands Mint strikes — for use in Luxembourg — 120 million euro coins, worth a total of more than 40 million euros, with the Luxembourg national side. The Luxembourg coins bear the effigy of Grand Duke Henri (born on 16 April 1955 and sworn in on 7 October 2000), using a design by the artist Yvette Gastauer-Claire in a classical style (on the 1-, 2- and 5-cent coins), a traditional line-drawn style (on the 10-, 20- and 50-cent coins) and a modern abstract style (on the 1- and 2-euro coins).
The withdrawal from circulation of notes and coins in national currency units in the countries belonging to the MU ends. The Convention on the Future of Europe holds its inaugural session.
The convergence reports by the ECB and the European Commission are published (on 1 May and 22 May respectively).
The European Commission postpones from 2004 to 2006 the established date for all the EU Member States to present ‘budgets close to balance’.
Four countries in the EMU are in difficulties: Germany, France, Italy and Portugal. Only France refuses to agree, without reservations or any special conditions, to cut its structural deficit by at least 0.5 % per year from 2003.
Ireland ratifies the Nice Treaty by referendum (making it the last country to ratify the Treaty).
Brussels European Council: the ten applicant countries chosen to join the EU in 2004 are Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia.
As the commitments under the SGP have been infringed, the European Commission refers the matter to the EU Ecofin Council and launches:
- the ‘early warning’ disciplinary procedure against France;
- the ‘excessive deficit procedure’ against
Proposals from the European Commission to make for a better understanding of SGP (for example, isolating the impact of the short-term economic situation on the budgetary position), and more effective implementation (particularly through a restatement of the political commitment to implement the pact).
Copenhagen European Council: Accession negotiations with the ten applicant countries are concluded.