Pastor General's Report
Common European Currency Idea Heats UpCommon European Currency Idea Heats Up

"Will U.S. President Jimmy Carter succeed where Joseph Vissarionovich Stalin failed? Will he frighten the Europeans into a genuine union, transforming their Community from a glorified tariff union into a political family?"

This provocative question was asked in one of West Germany's leading newspapers, the weekly Die Zeit of Hamburg in its April 23, 1978 edition.

Die Ziet went on to explain that the European Community (Common Market) has existed only as an economic entity up until now whereas the "political flywheel... has stood still."

But now, according to this respected weekly, "the triple Carter shock (his off-again-on-again behavior in connection with the neutron device, the threatened embargo on uranium shipments and the dollar weakness) has genuinely frightened Europe. Will this instill new life into European integration efforts?"

At the Spring summit conference of the EC in Copenhagen, the nine governments again brushed off the old idea of a European currency union. This had been proposed in fact adopted as a major Community objective in 1971. It was known then as the Werner Plan. The oil crisis of 1973-4 and the resultant worldwide recession put an effective squelch on the idea of an "EMU" (European Monetary Union). In early 1975 the British weekly, The Economist, summed up the prospects for the Werner Plan: "EMU is dead. What next?"

Now, however, interest in it is reviving, thanks to the dollar crisis and uncertainties over American leadership. One of its biggest boosters is Ray Jenkins, the British president of the EEC Commission. He has been speaking out forcefully for its adoption in several forums recently. He realizes that an EMU, together with a single common currency for Europe (to be introduced first as an addition to the several national currencies) would be a "radical institutional as well as psychological change." But it is time, he feels, to overcome inertia and make a "leap" towards EMU.

Jenkins also realizes that a monetary union and a common European currency would provide a powerful stimulus to getting Europe's "political flywheel" (using Die Zeit's terminology) moving.

Direct popular elections to a restructured European Parliament are scheduled next year. Jenkins envisions the strengthened Parliament as being responsible for administering the common currency operations. Thus, according to Jenkins, "there is no question that the creation of a monetary union would involve a significant transfer of power from member governments to the Community." This would be especially true when coupled with increased power for the European Parliament.

This idea of an EMU is slowly building up momentum. It bears watching to see how it develops further over the next few months.

Back To Top

Pastor General's ReportJune 05, 1978Vol 2 No. 20