No C 102/24 Official Journal of the European Communities 18. 4. 91 
Adaptations to technical progress are translated into 
Commission Directives each year, and a proposal for a 
Done at Brussels, 27 February 1991. 
1. Summary 
1.1. The proposals submitted to the intergovern­
mental conference on Economic and Monetary Union, 
as well as developments subsequent to the presentation 
of the Delors report, have given rise to this Additional 
Opinion which is divided into: 
— general comments (part 2), 
— comments on monetary policy (part 3), 
— comments on economic and budgetary policy 
(part 4), and 
— comments on the second stage and on transitional 
arrangements for the common currency in the third 
stage (part 5). 
1.2. The principal proposals and recommendations 
of the Additional Opinion sixth amendment will be adopted by the Commission 
very shortly. 
The Chairman 
of the Economic and Social Committee 
Francis STAEDELIN 
1.2.1. After the beginning of the third stage the ECU 
would be introduced as a common currency for all 
twelve Member States (points 5.6.2-5.6.4). The value of 
the ECU, already hardened by then (point 5.3.4), would 
be fixed on the day of its introduction by the European 
System of Central Banks (ESCB) on the basis of the 
prevailing exchange rate vis-a-vis the core of stable 
currencies (points 5.6.1-5.6.4). 
1.2.2. All Member States would participate in the 
work of the European System of Central Banks (itself 
responsible for regulating the ECU money supply and 
formulating a common monetary policy) and would be 
involved in the coordination of economic and budgetary 
policies (points 5.6.6-5.6.7). As was the case with the 
exchange-rate mechanism after its introduction in 1979 
(point 5.2.4), waivers could be provided for at the 
beginning of the thrid stage whereby the exchange Opinion on Economic and Monetary Union (EMU) 
(91/C 102/10) 
On 19 November 1990 the Economic and Social Committee decided to draw up an Opinion 
on Economic and Monetary Union in the European Community. This Opinion rounds off 
the ESC's Opinion of 9 October 1989 (OJ No C 329 of 30 December 1989) on the report on 
Economic and Monetary Union in the Community (Delors report) and the ESC's Opinion 
of 16 November 1989 (OJ No C 56 of 7 March 1990) on a) the proposal for a Council 
Decision on the convergence of economic performance and b) the recommendation for a 
Council Decision on cooperation between the central banks of the Member States. 
The Section for Economic, Financial and Monetary Questions, which was asked to carry out 
the preparatory work on the matter, adopted its Opinion on 12 February 1991. The Rappor­
teur was Mr Meyer-Horn. 
At its 284th plenary session (meeting of 27 February 1991) the Economic and Social Committee 
adopted the following Opinion by a large majority, with 6 abstentions. 
18. 4. 91 Official Journal of the European Communities No C 102/25 
rates of Member States failing to attain the requisite 
convergence would be allowed to go on fluctuating 
against the ECU. 
1.2.3. The Committee approves the idea that the 
European Central Bank (ECB) should be autonomous 
whilst being obliged to present a report, and believes 
that both the European Parliament and the Economic 
and Social Committee should be able to hold a debate 
on the ECB's annual report (point 3.4.4). The possibility 
of setting up a consultative council for the ESCB along 
the lines of the effective Central Bank Consultative 
Council of the Netherlands Bank should also be exam­
ined (point 3.4.5). 
1.2.4. The European Central Bank should be respon­
sible for daily intervention policy on the foreign-
exchange markets, but within the framework of guide­
lines laid down by the Council of Economic and Finance 
Ministers for a longer-term common exchange-rate pol­
icy vis-a-vis third currencies (point 3.6.2). 
1.2.5. In order to intensify economic policy cooper­
ation, the role of the Council of Economic and Finance 
Ministers (and hence the role of the European Com­
mission) should be strengthened. The ECOFIN Council 
could become a counterpart to the ESCB in ensuring 
the parallelism of economic and monetary union (point 
4.1.3). 
1.2.6. The reform programmes of the structurally 
weaker Member States will need to receive support 
from the Community, and be taken into account in the 
common economic policy guidelines, if these countries 
are to attain the requisite convergence (point 4.2.3). 
1.2.7. In the interests of greater convergence, broad-
based economic policy-making and the public support 
thereof, the Economic and Social Committee should 
be consulted whenever economic policy guidelines are 
drawn up. It should also be consulted on the country 
reports forming the basis of multilateral surveillance 
(points 4.3.3 and 4.3.4). 
1.2.8. The multilateral surveillance of economic and 
budgetary policies should encompass developments on 
the finance markets, including relations with capital 
markets outside the Community (point 4.3.5). In 
addition to the monitoring of the financing of budget 
deficits, an appropriate budgetary stance should also 
be defined for the Community as a whole (point 4.6). 
1.2.9. The particular concern of this Opinion is to 
ensure that Economic and Monetary Union can be 
achieved without the need for a two-speed Europe. The 
simultaneous introduction of the ECU in all twelve 
Member States during the third stage might well further this objective. The European economic area envisaged 
by the EEC together with the European Free Trade 
Association (EFTA), and perhaps even the East Euro­
pean countries, might also draw benefit from the exist­
ence of the ECU which would gradually develop into 
a key European currency and be accepted throughout 
Europe. 
2. General comments 
2.1. Major progress was made in 1990 towards Econ­
omic and Monetary Union: 
2.1.1. The first stage began on 1 July 1990. The 
second stage will begin on 1 January 1994 if the necess­
ary conditions have been fulfilled. A decision is due to 
be taken before 1997 on the beginning of the third 
stage. 
2.1.2. The liberalization of capital movements took 
effect on 1 July 1990—although in some areas it had 
been achieved even earlier—and the multilateral surveil­
lance of the convergence of economic performances has 
got under way. 
2.1.3. Further currencies have joined the exchange 
rate mechanism of the European Monetary System: the 
peseta on 19 June 1989 and pound sterling on 8 October 
1990. Both currencies will initially be allowed to fluctu­
ate within a band of 6%. In the case of the lira the 
margin was narrowed to 2,25 % on 7 January 1990. 
2.1.4. On 23 July 1990 the Monetary Committee of 
the European Community submitted a report entitled 
'Orientations for the preparation of the intergovern­
mental conference'. 
2.1.5. On 27 November 1990 the Committee of the 
Governors of the Central Banks, under the Chairman­
ship of Mr Karl Otto Poehl, presented the draft Statutes 
of a European System of Central Banks (ESCB) together 
with an introductory report and a commentary. 
2.1.6. On 21 August 1990 the Commission of the 
European Communities submitted a report on the 
objectives, principles, consequences and institutional 
aspects of economic and monetary union (Doc. ESC 
No 1659/90 fin.); in October 1990 the Commission also 
submitted a comprehensive report on the benefits and 
costs of Economic and Monetary Union ('One market, 
one money') and on 10 December proposed amend­
ments to the EC Treaty (Doc. ESC No 2500/90 fin.). 
2.1.7. The intergovernmental conference on Econ­
omic and Monetary Union, convened by the Heads 
of State or Government in October 1990, began its 
deliberations on 14 December 1990 alongside an inter­
governmental conference devoted to the political 
dimension of the European Communities. On 8 January 
1991 the British presented to the intergovernmental 
No C 102/26 Official Journal of the European Communities 18. 4. 91 
conference on Economic and Monetary Union new 
proposals for a common European currency, the so-
called 'hard ECU'. The Spanish submitted their own 
proposals on 24 January 1991. 
2.2. Although such progress is welcomed by the 
Economic and Social Committee it cannot obscure the 
fact that there are still considerable objections and 
doubts to be overcome. These are described in para­
graphs 2.2.1 to 2.2.6 below. 
2.2.1. The political will to submit national economic 
and social policies and particularly budgetary policies 
to the constraints of common economic policy guide­
lines and the requirements of a common monetary 
policy aimed at achieving price stability, does not yet 
seem to exist everywhere, especially since any such 
action would be seen in many Member States as a loss 
of sovereignty. Some Member States believe that far-
reaching economic convergence would require greater 
Community powers than those taking shape in the 
intergovernmental conference on political union. 
2.2.2. There are still wide variations in inflation 
rates, notably between currencies which have long been 
in the narrow band of the exchange-rate mechanism of 
the European Monetary System (EMS), and the others. 
(Inflation rates in October 1990 are as follows: 
DK: 2,7 %; NL: 2,9 %; D: 3,3 %; IRL: 3,5 %; F: 3,8 %; 
L: 4,2 %; B: 4,3 %; I: 6,8 %; E: 7,1 %; GB: 10,0 %; 
P: 14,4%; GR: 22,3%.). 
2.2.3. Some Member State budget deficits which con­
tinue to be financed by central bank borrowing can only 
be successfully tackled by addressing national resource 
allocation problems. 
2.2.4. There are some reservations about stipulating 
under the Treaty that general price-level stability is the 
priority of the monetary policy of a European System 
of Central Banks (ESCB). At a more general level com­
mentators are wondering in some Member States 
whether it is at all possible to have a common monetary 
policy embracing twelve countries and aimed at achiev­
ing general price-level stability when there is no tangible 
proof either that the economic policies of the twelve 
different countries can actually be subordinated to com­
mon guidelines or that the national measures deemed 
necessary to successfully overcome unemployment, 
structural weaknesses and regional imbalances are in 
fact compatible with the common goal of general price-
level stability. 
2.2.5. In some Member States there are reservations 
about whether the independence of a European Central 
Bank should be guaranteed under the Treaty, whilst 
other Member States wonder how far such indepen­
dence would be compatible with democratic account­
ability to the Council of Ministers and the European 
Parliament. 2.2.6. Finally, it is unclear who would have responsi­
bility in a monetary union for the common exchange-
rate policy vis-a-vis third countries: the Council of 
Ministers following agreement with the ESCB, or the 
ESCB alone. 
2.3. These objections and doubts are largely 
unknown to the wider public in the majority of Member 
States. The discussion of Economic and Monetary 
Union options is often over-simplified and frequently 
limited to the question of timing and institutional 
arrangements. 
However, given the importance of the decisions to 
be taken, parliamentary bodies, economic and social 
organizations and the social partners such as are rep­
resented on the Economic and Social Committee, 
should be involved in discussions at an early date and 
the ESC should itself be consulted. 
2.3.1. The Commission report on the benefits and 
costs of monetary union is not a document which would 
easily win over the general public. The benefits of 
monetary union cannot be measured solely in terms of 
the disappearance of exchange costs and currency risks; 
at least as important, though naturally hard to quantify, 
are the benefits of easier price comparison in the whole 
of the Community, and the use of a single currency as 
the visible expression of the economic and political 
cohesion of the Member States. The benefits of the 
international role of a European currency destined to 
become a major world currency alongside the US dollar 
and the yen are also not easy to evaluate (cf. point 
5.6.5). Thus far, the importance of the Community in 
monetary terms has not been felt. Approximately 60% 
of the world's foreign exchange reserves are held in US 
dollars and less than a quarter in DM and £. The US 
economy is also at a great advantage not only because 
trade can be conducted in US dollars within the USA, 
but also because America's import-export trade is 
denominated in dollars in many parts of the world. In 
Europe, by contrast, not even the Airbus can be sold 
in a European currency even though several European 
countries are jointly involved in its development and 
construction. 
2.3.2. The advantages of monetary union neverthe­
less have to be weighed against a number of disadvan­
tages which are not explained clearly enough in the 
Commission's report. Most workers and ordinary 
members of the public—and to some extent even poli­
ticians and entrepreneurs—are unaware of these disad­
vantages which concern a) the abandonment of parity 
adjustments as an instrument for fine-tuning economic 
policy, b) the abandonment of national monetary poli­
cies, and therefore national policies on interest rates 
and minimum reserves, and finally c) major changes in 
financial policy to avoid future central bank financing 
of excessive budget deficits, a move which would be 
painful for many countries. 
2.3.3. The consequences of Economic and Monetary 
Union deserve to be better known and should be dis-
18. 4. 91 Official Journal of the European Communities No C 102/27 
cussed more openly and not just in the intergovern­
mental conference. The economic, budgetary and social 
policy constraints which would flow from a common 
monetary policy geared to the principle of general price-
level stability have not, for example, been discussed 
with sufficient openness and clarity in the proposals 
awaiting a decision at the intergovernmental confer­
ence. This is true for example of wage policy, which 
would have to be linked in all Member States to pro­
ductivity gains, as well as social policy in general, which 
would no longer be financed by inflationary increases 
in the money supply, i.e. by central bank financing of 
budget deficits. Some of these aspects are discussed in 
more detail in parts 3 and 4 of this Opinion. 
2.4. Leaving aside the comments on certain aspects 
of monetary, economic and budgetary policies, the 
Economic and Social Committee basically supports the 
proposed path to Economic and Monetary Union, as 
laid out in the Delors report and described in greatest 
detail subsequently. 
2.4.1. The model of Economic and Monetary Union 
is approved since it is a logical further step along 
the road to European integration. Together with the 
completion of the Single Market in 1992, it will serve 
as a model for closer economic integration for the 
whole of Europe. The European Commission must 
nevertheless boldly and unambiguously address itself 
to the constraints on economic and particularly social 
policy which will arise as progress is made towards 
Economic and Monetary Union. 
2.4.2. If, for political and other reasons, Economic 
and Monetary Union is to be achieved soon, i.e. by the 
year 2 000, then transitional arrangements for a certain 
number of Member States should be in place by the 
beginning of the third stage. Under these transitional 
arrangements only a core of particularly stable currenc­
ies and not all twelve currencies would have to be 
immediately linked to each other by irrevocably fixed 
exchange rates. Accordingly, currencies still requiring 
exchange-rate adjustments could one by one become 
'full' members of the monetary system after the begin­
ning of the third stage. 
3. Comments on monetary policy 
3.1. The advantages of monetary union, including 
full price comparison and the disappearance of 
exchange costs, can only be fully exploited when there 
are irrevocably fixed exchange rates between currencies 
participating in the ERM and when these fixed 
exchange rates are finally replaced by a single European 
currency. There are powerful economic and political 
reasons in reality why this further step should be taken. 
For political reasons, such a single European currency 
could not be one of the existing national currencies. The Economic and Social Committee therefore wel­
comes the European Commission's proposal that the 
EEC Treaty be amended to eventually provide for a 
single currency in the Community. Point 5.6 of this 
Opinion examines the issues surrounding the step-by-
step introduction of a single European currency. 
3.2. Full monetary union, as is planned for the third 
stage, necessitates a uniform money and credit policy. 
In a uniform monetary area, subsidiarity (the partial 
reliance on national monetary policy) will be out of the 
question. The ESC therefore approves the creation of 
a European System of Central Banks (ESCB) in accord­
ance with the concrete proposals of the Committee of 
Governors of the Central Banks. The ESCB would be 
set up at the beginning of the second stage and at the 
beginning of the third stage would have full and sole 
responsibility for monetary policy and for control over 
the European money supply. 
3.3. The aims of a common European monetary 
policy, and the responsibilities of the ESCB therefore, 
must be laid down in the EEC Treaty. 
3.3.1. Monetary union can only be meaningfully 
based on elements which have made the Community 
attractive and ensured the European Monetary System's 
(EMS) success as an area of relative monetary stability. 
In accordance with the proposals of the EC Com­
mission, the Monetary Committee and the Committee 
of Governors of the Central Banks, the ESC therefore 
approves the newly proposed Article 3(g) (a) of the EEC 
Treaty which states that price stability is a primary 
objective of the ESCB. The frequently misunderstood 
concept of price stability (or more correctly general 
price-level stability or stable monetary value) could 
accordingly be spelt out in the newly proposed Article 
106(a)(1) of the EEC Treaty as referring to the concept 
of 'purchasing power not eroded yearly by inflationary 
increases in the money supply'. 
3.3.2. At the same time it should be made clear 
that the ESCB supports an economic policy based on 
common guidelines for the Community (cf. point 4.2), 
provided general price-level stability is not adversely 
affected. The ESCB cannot therefore be forced to find 
solutions to conflicting economic policy objectives at 
the expense of general price-level stability. 
3.3.3. Finally, and in accordance with the proposals 
referred to in point 3.3.1, it should be made clear in 
the newly proposed Articles 3(g)(a) and 106(a) of the 
EEC Treaty that the ESCB cannot be forced to finance 
public sector deficits through central bank lending. This 
would not in any way be in conflict with the fact 
that the ESCB is allowed to engage in public lending 
operations as part of its open market and liquidity 
policy. 
3.3.4. It is intended to make monetary policy the 
exclusive responsibility of the ESCB. This needs to be 
No C 102/28 Official Journal of the European Communities 18. 4. 91 
clarified since in most Member States of the Community 
monetary policy is not the exclusive responsibility of 
central banks so that any changes in the situation would 
be far-reaching and problematic. 
3.4. The status of the ECB as an independent insti­
tution with mandatory requirements to consult and 
report should be laid down clearly in the EEC Treaty. 
3.4.1. Experience suggests that general price-level 
stability can only be guaranteed if the ESCB does not 
have to take political instructions from national govern­
ments or Community institutions. Institutional, oper­
ational and personal independence must therefore all 
be guaranteed. Personal independence would itself be 
protected by the procedure laid down under the newly 
proposed Article 107(3) of the EEC Treaty whereby all 
the members of the Executive Board are to be appointed 
by the European Council, after consultations with the 
European Parliament, for a period of eight years. It 
would not be an infringement of personal independence 
if members of the Executive Board were precluded from 
serving for a second eight-year term of office. Such a 
measure would also make it easier to ensure the event­
ual appointment of Executive Board members from 
other countries not represented during the first or 
second terms of office. The appointment of staff and 
high-ranking officials of the European Central Bank 
should also reflect the need for a balanced represen­
tation of specialists from all Community Member 
States. 
3.4.2. The independence of the ESCB would more­
over only be guaranteed if individual national central 
banks had a comparable status of independence in 
performing functions within the federal structure of the 
ESCB. This point is dealt with in the newly proposed 
Article 106A, second paragraph, of the EEC Treaty. 
The independence of national central banks is also 
required under the proposed voting procedure in the 
Council of the ESCB (cf. point 3.8.1). According to this 
procedure, every Governor of a national bank would 
have one vote, as would members of the Executive 
Board appointed by the European Council. 
3.4.3. Whilst the Economic and Social Committee 
supports an independent ESCB free from political 
instructions, it is also aware of the need to clarify the 
procedure by which it has to report to the European 
Council and the European Parliament. The partici­
pation of European Commission and Council represen­
tatives (without voting rights) in the meetings of the 
ESCB Council, which is responsible for the formulation 
of European monetary policy, should accordingly be 
regulated by Treaty. 
3.4.4. The Committee approves the obligation to 
present a report, as proposed by Committee of Gover­
nors of the Central banks and the European Com­
mission and enshrined in the newly proposed Article 
109(4) of the EEC Treaty. The new provision stipulating that the European Parliament shall hold a debate on 
the conduct of economic and monetary policy, on the 
basis of the annual report of the ESCB and with the 
participation of the President of the ESCB (newly pro­
posed Article 109(5) of the EEC Treaty), is welcomed. 
The Monetary Committee's additional recommen­
dation that 'public opinion' be given 'regular expla­
nations' of the 'broad lines of ESCB policy' should be 
set out in even greater detail. To this end it would 
help if not only the European Parliament but also 
the Economic and Social Committee of the European 
Communities were given the possibility of holding a 
debate on the annual report of the ESCB, with the 
participation of the latter's President. 
3.4.5. The Economic and Social Council of the 
Netherlands (SER) confirms that the Central Bank Con­
sultative Council of the 'Netherlands Bank' is an effec­
tive body. The Council in question, which is appointed 
by the Crown, consults the economic and social groups 
represented on it even though the latter have no say in 
the decisions taken. The possibility of setting up a 
similar Consultative Council for the ESCB should there­
fore be looked into. 
3.4.6. The newly proposed Article 173 of the EEC 
Treaty which allows recourse to the European Court 
of Justice where legal acts of the ESCB are concerned, 
reflects the democratic accountability of the ESCB. It 
should also be made clear, perhaps in the parallel 
negotiations of the intergovernmental conference on 
political union, who exactly should be given the right 
to appeal to the European Court of Justice against 
decisions of the ESCB. 
3.5. The homogeneity of the ESCB's monetary policy 
must not be undermined by the failure to distinguish 
clearly between the powers of the European Central 
Bank and the powers of the national central banks. 
3.5.1. It should therefore be made absolutely clear 
that in the context of monetary union, the European 
Central Bank alone takes decisions on the use of dom­
estic and external monetary-policy instruments to influ­
ence the money supply and regulate the supply of credit, 
and alone controls the foreign exchange reserve assets 
transferred to it on behalf of the Community (newly 
proposed Article 108(2) of the EEC Treaty). 
3.5.2. National central banks would be represented 
on the Council of the European Central Bank by their 
respective Governors, and would thus be involved in the 
ECB Council's decision-making, but under the newly 
proposed Article 107(1) of the EEC Treaty they would 
have no independent domestic and external monetary 
policy powers in their own country. Their primary 
task would rather be to execute at national level the 
European Central Bank policies to which they con­
tribute. 
3.5.3. National central banks would also have to 
carry out duties which are not explicitly assigned to 
the European Central Bank (proposed ESCB statutes, 
Article 22 and Article 25). These include duties in the 
clearing and payment system, as well as perhaps bank-
18. 4. 91 Official Journal of the European Communities No C 102/29 
ing supervision insofar as this latter function is not 
entrusted to specific state supervisory authorities. The 
European Central Bank could itself be assigned the task 
of coordinating cooperation between national banking 
supervisory authorities responsible for monitoring the 
activities (including international activities) of credit 
institutions established on their territory. This is the 
principle of 'surveillance in the country of establish­
ment'. On the basis of the comment on Article 14 in 
the report of the Committee of Governors of the Central 
Banks it would appear that most of the national central 
banks agree with this distribution of functions although 
this is not yet the case with the governments of some 
Member States. 
3.5.4. The Division of responsibilities within the 
Council of the ECB between the Executive Board mem­
bers (who would be responsible for daily management) 
and the Governors of the national central banks should 
be clarified in the newly proposed Article 107(6) of the 
EEC Treaty and Article 12 of the draft Statutes of the 
ESCB. The same applies to the delegation of certain 
powers by the Council of the Central Bank to the 
Executive Board members (provided for under the new­
ly proposed Article 107(8) of the EC Treaty). 
3.6. Responsibilities for the exchange-rate policy vis­
a-vis third countries within the context of full monetary 
union must also be clarified in advance. 
3.6.1. Decisions on changes in exchange-rate parities 
generally lie with governments and not central banks. 
The Committee of Governors of the Central Banks has 
therefore realistically recommended that decisions on 
the 'exchange rate regime' of a European monetary 
union and the exchange-rate policy vis-a-vis third coun­
try currencies be left with the political authorities, i.e. 
the ECOFIN Council, although the European Central 
Bank would be consulted beforehand. The European 
Commission rightly considers it important that the 
exchange rate policy should be defined within the 
framework of close cooperation between the ECB and 
the ECOFIN Council. 
3.6.2. However it will no longer be merely a question 
of taking decisions of principle on external monetary 
policy, as was the case with previous changes of parities 
or of pivotal rates in the European Monetary System. 
In future, given the persistence of fluctuating, 'flexible' 
exchange rates internationally, it will be more a ques­
tion of deciding the daily intervention policy for the 
single European currency on the world's foreign-
exchange markets. Pursuant to the newly proposed 
Article 108(1) of the EEC Treaty, this task should lie 
in the hands of the European Central Bank, if need be 
in accordance with the guidelines for a longer-term 
common exchange-rate policy vis-a-vis the US dollar 
and Japanese yen, as laid down periodically by the ECOFIN Council. At any event the external monetary 
policy should be compatible with the ESCB's general 
monetary policy based on price-level stability. 
3.7. Finally, a clear decision should be taken on who 
would represent the European System of Central Banks 
(ESCB) in international monetary institutions and con­
ferences. 
3.7.1. The Economic and Social Committee regards 
as adequate the newly proposed Article 108(3) of the 
EEC Treaty whereby the ESCB shall be represented in 
the group of leading industrial nations (G7) by the 
President of the European Central Bank (ECB), together 
with the President of the ECOFIN Council and a mem­
ber of the European Commission. 
3.7.2. With regard to international monetary cooper­
ation, the Committee of Governors of Central Banks 
would leave open the question of whether national 
central banks belonging to the ESCB should be able as 
now to conclude agreements with central banks from 
third countries and also, for instance, remain members 
of the Bank for International Settlements (BIS) in Basel 
in an individual capacity. If accepted, such arrange­
ments might weaken the role which an ESCB with a 
single monetary policy and ultimately a single European 
currency would be expected to play on the international 
stage. On the other hand, given the federative character 
of the ESCB, this rule would appear to be justified 
since, in accordance with the newly proposed Article 
106(2) of the EEC Treaty, national central banks retain 
their legal personality under national law, whereas only 
the ECB acquires legal personality under international 
law. 
3.8. The voting procedures to be used when monet­
ary policy decisions are taken by the Council of the 
European Central Bank should be clarified from the 
outset. 
3.8.1. Monetary policy decisions should be adopted 
in the ESCB by a simple majority. This means that 
members of the European Central Bank's Council, i.e. 
the six members of the Executive Board and the Gover­
nors of the national central banks, would each have 
one vote. Differing from the line taken in its earlier 
Opinion (OJ No C 329 of 30 December 1989, point 
2.4.4) on weighted voting, the ESC supports the single 
vote arrangement since it satisfies the requirement to 
apply monetary policy decisions to the Community as 
a whole, whilst making due allowance for national 
considerations. 
3.8.2. Weighted voting would consequently be 
allowed only in the case of financial decisions (capital 
of the ECB, transfer of foreign reserve assets, allocation 
of profits, etc.). 
4. Comments on economic and budgetary policy 
4.1. Monetary union is unthinkable without econ­
omic union; there must even be a large degree of paral­
lelism between the two. 
No C 102/30 Official Journal of the European Communities 18. 4. 91 
4.1.1. A common monetary policy can only underpin 
national economic policies if the latter are focused 
on common objectives and are compatible with the 
principle of general price-level stability. Economic poli­
cies aimed at achieving overall parallel development do 
not require a new European institution along the lines 
of the ESCB set up to regulate monetary policy. 
4.1.2. While there can only be one monetary policy, 
each Member State has some room for manoeuvre 
regarding economic policy. In pursuance of the general 
objectives of the EEC Treaty (old Articles 2 and 104), 
Member States may take individual initiatives and bring 
into play different instrument in accordance with their 
own particular circumstances and traditions. In econ­
omic policy the principle of subsidiarity therefore 
applies. This means that European-level action is not 
needed if measures can be taken as effectively or more 
effectively at national or regional level. 
4.1.3. Economic policy cooperation must be intensi­
fied and deepened and national economic policies close­
ly coordinated if economic development is to follow and 
maintain a generally parallel course in the Community 
despite national autonomy in economic policy-making. 
The role of the Council of economic and financial 
ministers, and hence the role of the European Com­
mission, must accordingly be strengthened. The 
ECOFIN Council could thus become a counterpart 
(including an institutional counterpart) to the European 
System of Central Banks in ensuring the parallelism of 
Economic and Monetary Union. This economic policy 
to monetary policy does not mean that decision of the 
ESCB would have to receive the blessing of the ECOFIN 
Council or that the latter would have the last word in 
cases of conflict. Any conflict between monetary and 
economic policy would have to be avoided by perma­
nent coordination between the two bodies, as pointed 
out in point 4.1.4. Public opinion might certainly also 
have a role to play here. In the case of major conflicts 
(e.g. contradiction between general price-level stability 
and exchange-rate adjustments vis-a-vis third curren­
cies), an unanimous vote of no confidence in the ESCB 
by the ECOFIN Council might possibly be envisaged. 
4.1.4. The common monetary policy of the ESCB 
(based on general price-level stability) and the economic 
policy coordination work carried out by the ECOFIN 
Council (geared to achievement of the goal of economic 
convergence) must be continually brought in line with 
one another. This would require the participation of 
ECB representatives, on the one hand, and representa­
tives of the ECOFIN Council, the European Council 
and the European Commission, on the other, at each 
other's meetings, though without voting rights. The 
proposals made in this connection (newly proposed 
Articles 107(3) and 109(1) of the EEC Treaty and Articles 15(1) and 15(2) of the draft Statute of the 
European System of Central Banks) are approved. The 
task of securing alignment between a common monet­
ary policy on the one hand, and coordinated economic 
policies based on common guidelines on the other, 
would be made easier if an update of the current state 
of interconnections between the two policies were pro­
vided on the basis of the continous two-way flow of 
information between the bodies of the ESCB and the 
ECOFIN Council. 
4.2. It is vital for coordination in economic and 
budgetary policy matters that the Council of Ministers 
reaches agreement on common economic policy guide­
lines and objectives. 
4.2.1. Without a consensus on such economy policy 
guidelines it is impossible to guarantee the economic 
convergence required for monetary union as well as the 
compatibility of national economic policies required for 
economic union. 
4.2.2. However, the use of a rigid system of planned 
targets in conjunction with the economic policy guide­
lines should be avoided; instead whenever general econ­
omic conditions change—and occasionally they change 
very rapidly—it should be possible to make a swift 
revision of economic policy guidelines and targets. 
4.2.3. The economic reform programmes of the 
structurally weaker Member States wil need to be given 
support if they are to attain the requisite convergence. 
This should be reflected in the Community's own econ­
omic policy guidelines. A decision has already been 
taken by the Community to tackle structural weakness­
es by transferring resources from its increased structural 
funds, the sums involved amounting to 3-5% of the 
gross domestic product of the countries in question. 
The structural weaknesses of some Member States' 
economies should also receive attention during re­
examination of the reform of the structural funds at 
the end of 1991 (!) and revision of the medium-term 
financial prospects (1993-1997) during the first half of 
1992, as well as in the Community's industrial policy. In 
this area of industrial policy the European Commission 
presented its new 'Guidelines for a Community 
approach' (Doc. COM(90) 566 final), on 16 November 
1990, a communication on which the Economic and 
Social Committee is currently preparing an Opinion. 
4.3. Given their vital importance, common economic 
policy guidelines must be drawn up with great care. 
(*) See Article 19 of Regulation (EEC) No 2052/88 of the Council 
of 24 June 1988. 
lD.^1 C^fficialJournal of the European Communities ^ocit^i 
The preparatory stage should include consultations 
with economic and social interest groups. 
^BL If the ECCOEl^ Council, asaEuropean body 
with no supporting framework of its own, is to play its 
rolein harmonising andcoordinatingeconomicpoli 
cies,thetneEuropeanCommissionmustbeputina 
position where it can tal^e the necessary steps to prepare 
thedecisionsof the Councilof ministers andensure 
theongoingsurveillanceofeconomicconvergence.lt 
will therefore he necessary to strengthen further the 
multilateral surveillance launched in the second half 
of l^Oandinvolvingalleconomic policy aspectsof 
importance tothe Community ^price and cost trends^ 
competitiveness^ employments regional developments 
public budgets^ 
^.^. Lach year the Commission should establish 
economic policyguidelines which wouldbebasedon 
an assessment of economic performance in the Aiember 
states and would have to be acted on by the ECCOEl^ 
Council and the European Council in accordance with 
procedures to be laid down under the newly proposed 
Article l^CoftheLFCfreaty^Theseguidelines would 
be expected to refer specificallyto finance policy,labour 
market policyand structural policy in order to ensure 
the compatibility of Aiember^tates'economicpolicies^ 
^.^. ^hen the pluriannual economic policy guide 
lines covering three to five years are laid down, itwould 
appear advisable to consult not only the European 
parliament but also the Economic and ^oc^al Commit 
tee.TheE^C should also be informed of the results of 
the multilateral surveillance just as European, national 
and regional parliaments are ^cf. C^] ^o C ^ of 
^Aiarch 1^0, points 
^BL Eurthermore, the E^C should be consulted on 
thecountry reports, which are tobepreparedby the 
Commission for the ECCoEll^Council for the purpose 
of multilateral surveillance. This consultation of the 
E^C would hopefully ensure broadbased economic 
policymaking andadialoguebetweeneconomicand 
social interest groupsinthe interests of greaterecon 
omicpolicy convergence andpublicsupport therefor 
^cf C^]^oC^of^Aiarchl^O,points^and^ 
^Bo. The multilateral surveillance of economic and 
budgetary policies should encompass developments on 
the finance markets, including relations with capital 
markets outside theCommunity. Lhefreemovement 
of capital between Comunity and nonCommunity 
countries should also be regulated clearly when Articles 
^to^of the EECTreaty are revised. ^BL The implementation of economic policy adjust 
ments considered necessary on the basis of multilateral 
surveillance will be of crucial importance forthecoordi 
nationof economic policiesbasedoncommonguide^ 
lines. 
^BLL The question is whether such adjustments 
could be made in the Council of Aiinistersasaresult 
of ^confidential peergroup pressure' or whether the 
formal recommendations and public declarations made 
on the proposal of the Commission alone will achieve 
this end.The best of overcoming economic difficulties 
and maloing economic policy adjustments would be via 
the newly proposed Articlel^pi^ of the EECTreaty 
on the granting of special financial support subject to 
certain conditions. 
^.^.^. The Aionetary Committee is even contemplate 
ingsanctions, which would involve the suspensionof 
payments from the Community budget and recourse to 
the European Court of justice. Agreement would have 
tobereached before the startof the second stage on 
the scope for such sanctions and the form they would 
tal^e. 
^.eo. The Economic and ^ocialCommittee endorses 
the Commission'sview that the role of the Community 
should bestrengthened in policy areas with a major 
Europeanwide impact. 
^BoBL Areas of Europeanwide importance include 
inparticular competition policy^ trade policy^ research 
and developments Europeanwide infrastructure, 
especially in connectionwith regional policy^ environs 
mental protections and some aspects of taxation. 
^BoB^. A particularly important policy area stems 
from the desire to ensure that the Community is econ 
omicallyandsociallycohesive. C^f special importance 
here is incomes policy.R-esponsibility for filing wages 
and salaries must, as now,remain in the hands of the 
two sides of industry ^cf.C^]l^oC^^of^tOecem 
berl^^, points ^..^ and ^.^. In conjunction with 
collective wage bargaining however hte Community 
should also assume its responsibilities for improving 
labour market as well as education and training 
schemes. 
^Bo.^. It needs to be made clear how Community 
policycanbe substantially strengthened inthe above 
areas which transcend the immediate remit of the 
ECCOElc^ Council. The strengthening of Community 
policy is one of the aspects of Economic and Aionetary 
Unionwhich are linked to the Communities^political 
dimensions this matter will consequently have to be 
discussed by the concurrent intergovernmental confer 
ence on political union. 
^.D. The inclusion of budgetary policies is of crucial 
importance if economic policies are tobe successfully 
No C 102/32 Official Journal of the European Communities 18. 4. 91 
coordinated. The Committee shares the Monetary 
Committee's view that efforts should not be confined 
to the monitoring of budget deficits. Other aspects of 
budgetary policy should also be coordinated and an 
appropriate budgetary stance defined for the Com­
munity as a whole. The budget of the European Com­
munities might be able to play an increasingly import­
ant role here. 
4.6.1. The Committee shares the Commission's 
views that the existence and financing of excessive 
budget deficits must be viewed and judged according 
to how it affects a common monetary policy geared to 
general price-level stability. 
4.6.2. At least two fundamental rules for budgetary 
policy should be embodied in the EEC Treaty: firstly 
there should be no 'monetary' financing of public 'defi­
cits', i.e. no central bank loans or privileged access 
to the money markets for the public authorities, and 
secondly no Member State should be able to benefit 
from an unconditional guarantee concerning its public 
debt either from the Community or from another Mem­
ber State. 
4.6.3. How 'excessive budget deficit' or 'excessive' 
public debt is defined in accordance with European-
wide criteria should also be clarified. Suitable yardsticks 
would include the relationship between budget deficit/ 
public debt and average gross domestic product over a 
number of years. Another acceptable guideline would 
be to apply the 'golden rule' of public finance, namely 
that the budget deficit should not exceed public invest­
ment expenditure. However, the expediency of includ­
ing such criteria in a Council Directive on multilateral 
surveillance is open to debate. The Monetary Commit­
tee's concerns on this matter are shared. 
4.6.4. At all events the budgetary policy situation 
should be assessed in conjunction with overall economic 
developments. Only in this way will it be possible to 
take into account unusual circumstances such as the 
exceptional funds temporarily needed by the Federal 
Republic of Germany to support redevelopment in the 
new Lander. 
4.7. It is to be regretted that only slow progress has 
been made so far towards the fiscal harmonization 
required for the completion of the Internal Market. The 
Commission rightly points out that the competitive 
pressures stemming from tax differences will intensify 
in economic union. This is particularly true of persistent 
differences in the taxation of capital investment income 
which will have increasingly powerful effects in a mon­
etary union with free movement of capital and no 
exchange-rate risks. 5. Comments on the second stage and on transitional 
arrangements for the common currency in the third 
stage 
5.1. From the political standpoint, there are many 
reasons for a rapid transition to complete monetary 
union, i.e. for a brief second stage. According to the 
European Council decision of 28 October 1990, this 
second stage would begin on 1 January 1994 provided 
the necessary conditions had been fulfilled. There can 
therefore be nothing automatic about transition to the 
second stage. 
5.1.1. Politically, the desire to enter the final, irre­
versible stage of monetary union after a brief second 
stage is understandable given the desire to exploit the 
dynamics of the completion of the Single Market and 
the expectations aroused by German unification and 
events in Central and Eastern Europe. 
5.1.2. Nevertheless, a more sober economic appraisal 
suggests that progress towards convergent economic 
performance (essential to complete monetary union) 
had been achieved only by long-established participants 
in the EMS exchange-rate mechanism. The three to 
seven times higher inflation rates in the other Member 
States mean that the conditions for complete monetary 
integration clearly cannot be fulfilled so quickly. 
5.1.3. Finally, institutionally, there remains a great 
deal to be done to strengthen the role of the Community 
institutions if, after a short second stage, they are to 
rapidly perform the functions assigned to them within 
the context of full Economic and Monetary Union. 
5.2. The continuing absence of economic conver­
gence in the Community as a whole derives from struc­
tural weaknesses in some Member States. These struc­
tural weaknesses will be even more apparent in the next 
few years with the completion of the Internal Market, 
especially if there are to be cyclical downturns or econ­
omic setbacks caused by political crises. 
5.2.1. In the short term (i.e. during the second stage 
of Economic and Monetary Union if it turns out to be 
short) these weaknesses cannot be completely elimin­
ated either by closer economic cooperation or by finan­
cial assistance from the Community structural funds, 
for which increased resources should nevertheless be 
allocated. Rigorous economic policy programmes and 
implementation of the decision already taken to 'trans­
fer substantial resources' from the Community's 
increased Structural Funds, will however ensure that 
these countries' economies are more convergent with 
those of the rest of the Community. The last two 
European currencies to remain outside the EMS 
exchange rate mechanism, the escudo and the drachma, 
might also be able to join before the beginning of the 
second stage. The inclusion of all twelve currencies in 
18. 4. 91 Official Journal of the European Communities No C 102/33 
the exchange rate mechanism before 1994 should not 
however lead to the conclusion that adjustment of 
pivotal rates can then be abandoned. 
5.2.2. The ESC takes the view (OJ No C 329 of 
30 December 1989, point 3.2.7) that the structurally 
weaker Member States should continue to rely on 
exchange rate adjustments for as long as possible as 
a means of dealing with adjustment pressures; these 
pressures, resulting from completion of the Internal 
Market accompanied by the free movement of capital, 
rule out the retention of obsolete currency parities 
which would create new imbalances. 
5.2.3. Because of the high level of economic interde­
pendence in the Community, the use of exchange rate 
adjustments as an instrument of economic policy has 
an immediate effect on all prices and incomes. Since 
1987, however, no use has been made of exchange 
rate adjustments within the European Monetary System 
even though inflation rates have varied. The exchange 
rate stability described here can nevertheless not conceal 
the fact that some of these currencies are under pressure 
on the foreign exchange markets. Such exchange rate 
stability in no way guarantees that there will be no 
changes in pivotal rates either before 1994 or during 
the 'short' second stage or that we shall then be on the 
threshold of a system of irrevocably fixed exchanges 
rates. 
5.2.4. During the first eight years after the introduc­
tion of the exchange rate mechanism in 1979 there were 
eleven adjustments of pivotal rates. A wider band for 
currency fluctuations (6% instead of 2,25%) was and 
still is needed by several EC currencies. But despite this 
uneven participation in the exchange rate mechanism 
there has been no talk of a two-speed Europe. Instead 
there have been words of praise for this 'monetary area 
of relative stability' and its 'disciplining effect' on the 
Community as a whole. This past experience should be 
taken into account when deciding whether or not the 
second stage should be brief and when working on the 
transitional arrangements which need to be made for 
some Member States at the beginning of the third stage. 
5.3. The need for and characteristics of an intermedi­
ate second stage have still not been convincingly and 
clearly described (OJ No C 329 of 30 December 1989, 
point 3.3.3). 
5.3.1. Many believe that an intermediate second 
stage could be of short duration. On the other hand, 
economic and monetary cooperation should be so inten­
sified that 'over a period' the required degree of budget­
ary discipline and general price-level stability would be 
observed. This at least is what the Monetary Committee 
believes. 
5.3.2. A short second stage would be helpful for the 
ESCB. The ESCB should be established at the beginning 
of the second stage, although national authorities 
should initially retain individual responsibility for mon­
etary policy. The ESC has already drawn attention (OJ 
No C 329 of 30 December 1989, point 3.3.2) to the 
damage which would be done to the ESCB's image if it remained without monetary powers for any length 
of time or, in the words of the Monetary Committee, 
if it were to be 'set up as an empty shell'. 
5.3.3. The ECB should therefore be consulted from 
the outset on all decisions still taken by the national 
central banks and should have the task of promoting 
the harmonization of monetary-policy instruments. The 
legal framework for ESCB activities provided for by 
the newly proposed Article 109D(3) of the EEC Treaty 
(for example, with regard to minimum reserves and 
obligatory reports by the credit institutions) would have 
to be set up without delay. 
5.3.4. During the second stage the European Central 
Bank would have to turn its attention to finding suitable 
ways of promoting the private and public use of the 
ECU (cf. OJ No C 329 of 30 December 1989, point 
3.3.4). The ECU would be used more widely (means 
of payment, unit of account, balance-sheets, statistics, 
tariffs and fares, pricing) if it were 'hardened' through 
a redefinition of the currency basket. The Spanish have 
proposed that this should be achieved by fixing the 
exchange rate of the ECU against those currencies 
which do not suffer devaluations and by redefining the 
composition and weighting of the ECU currency basket 
whenever pivotal rates and adjusted within the 
exchange-rate mechanism. The permanent pegging of 
the ECU to the stable currencies of the European Com­
munity would mean a move away from a basket of 
currencies with a fluctuating value to one with a fixed 
value. This would facilitate the later third and last 
stage, namely the transition from the ECU currency 
basket to a common European currency which would 
be issued by the ESCB in the form of banknotes and 
coins. 
5.4. The shortness or length of the second stage will 
depend on a future political decision as to whether all 
the relevant conditions, i.e. the convergence of econ­
omic development, must first be satisfied by all twelve 
Member States or whether some are already in a pos­
ition to enter into full monetary union. 
5.4.1. A monetary union based on irrevocably fixed 
exchange rates could not comprise all twelve Member 
States from the outset if for political reasons it had 
to be established quickly. Such a step would entail 
considerable risks for general price-level stability if 
economic and monetary policy were aimed at an attain­
able 'average convergence', involving a correspondingly 
higher rate of Community inflation. A further danger 
would be the urgent need for compensatory public 
funding to assist the structurally weaker Member States. 
5.4.2. Together with the assistance provided by the 
Community's structural funds, such compensatory 
No C 102/34 Official Journal of the European Communities 18. 4. 91 
financing would have to be on a considerable scale 
since countries still structurally weaker could no longer 
continue to offset their lack of competitiveness by 
exchange rate adjustments. These countries, however, 
are dependent on such adjustments owing to a lack of 
labour mobility and low wage flexibility. 
5.4.3. The transfers necessitated by an early aban­
donment of exchange rate adjustments as an instrument 
of economic policy would impose a considerable econ­
omic burden on the Community and its capital market, 
as well as being politically unpopular. This assessment 
is confirmed by the experience of a similar financial 
transfer between the 'richer' and 'poorer' Lander of the 
Federal Republic of Germany. 
5.5. The earlier monetary union is established with 
irrevocably fixed exchange rates, the greater the need 
to introduce transitional arrangements for certain 
Member States at the start of this third and final stage 
(OJ No C 329 of 30 December 1989, point 3.4.2). This 
would no more give rise to a two-speed Europe, than 
has hitherto been the case with the exchange rate mech­
anisms of the EMS. 
5.5.1. A transitional provision could be included in 
the newly proposed Article 109G allowing Member 
States which are still dependent on exchange rate 
adjustments to initially remain outside the irrevocably 
fixed exchange-rate system, just as certain currencies 
only joined the EMS exchange-rate mechanism at a 
later date (or had still not joined by the beginning of 
1991). 
5.5.2. An initial group of five to eight stable currenc­
ies would provide a considerable incentive for the other 
Member States of the Community to eventually join. 
Such a group of stable currencies already exists, de 
facto, in the exchange-rate mechanism where there is a 
hard core of currencies forming an area of non-fluctuat­
ing exchange rates and thus serving to some extent as 
a forerunner of monetary union. This would seem 
to be a more promising approach than a precipitate 
admission of all Member States to the irrevocably fixed 
exchange rate system with the risk of a complete failure 
of the monetary union with all its adverse consequences 
for the process of European integration. 
5.6. The arrangements outlined in point 5.5 could 
be combined with elements of the British and Spanish 
proposals on the introduction of a 'hard ECU'. 
5.6.1. A 'hard' ECU could be issued through the 
European System of Central Banks and would circulate 
in all Member States as a common currency. With the 
ECU, as well as the creation of an ESCB responsible 
for a common monetary policy, a decisive step would 
have been taken on the road to monetary union. 
5.6.2. A 'hard ECU' would exist insofar as its value 
would no longer be determined by the previously 
defined basket of currencies but by a fixed, unchanging exchange relationship to the stable Community currenc­
ies bound to one another by irrevocably fixed exchange 
rates. 
5.6.3. In countries whose currencies were linked to 
one another by irrevocably fixed exchange rates the 
ECU could soon become the sole currency by replacing 
the national currency. In the other Member States the 
ECU would continue to circulate in parallel with the 
national currency whose exchange rate might still be 
able to change vis-a-vis the ECU. The ECU would thus 
become an externally visible link between the core 
countries of monetary union and those Member States 
whose currencies were not yet locked into the system 
by irrevocably fixed exchange rates. 
5.6.4. The ECU would therefore not be an 
additional, thirteenth currency, but a common Euro­
pean currency in accordance with the proposals of 
the European Commission and the Governors of the 
Central Banks. The latter do not believe however that 
the new common currency, the ECU, will replace 
national currencies overnight but consider that national 
currencies will remain in circulation for some time. 
During this transitional period the ECU would be used, 
alongside national currencies, as legal tender through­
out Europe. 
The ECU might accordingly be introduced over three 
stages: 
— With its introduction through the European System 
of Central Banks, the ECU would, during the tran­
sitional stage, be brought into circulation alongside 
national currencies in all twelve Member States. 
During this period the ECU would be in a fixed 
exchange relationship with 'core country' currenc­
ies, whose exchange rates would be irrevocably 
fixed against each other and the ECU, whilst 
exchange rate adjustments would be allowed in the 
other Member States. 
— During the second stage the ECU could initially 
become the single currency in the core countries 
referred to in the first indent whilst circulating in 
parallel with national currencies in the other Mem­
ber States. 
— Finally, during the third stage, the ECU would 
become the single currency in all countries of the 
Community (cf. point 5.6.9), i.e. there would no 
longer be any national currencies in circulation in 
any of the Member States. 
During the transitional period, those national currenc­
ies which were allowed to opt out of the system and 
were not immediately and irrevocably pegged to the 
ECU, might in some areas be used more and in other 
areas less than the ECU. Gresham's sixteenth century 
law whereby 'bad money drives out good' if both are 
legal tender would be partly vindicated and partly 
rebutted. This is the price which would have to be paid 
by the dual system, in addition to the difficulties facing 
the ESCB when pursuing a common monetary policy 
that had to accommodate European currencies whose 
exchange rates were not yet irreversibly fixed (cf. point 
5.6.6). 
18. 4. 91 Official Journal of the European Communities No C 102/35 
5.6.5. Thus before long the ECU might develop into 
a 'key' European currency to which currencies of other 
European countries (e.g. the Austrian schilling and 
Norwegian krone) could be pegged under more or less 
the same arrangements as before. Even currencies of 
non-European countries, previously based on the franc 
or pound sterling, might join in. The ECU would take 
on this role of a 'key' currency because it would be 
underpinned not by some new European Fund but by 
the authority and potential of the European System of 
Central Banks. As a 'key' European currency the ECU 
would be just as vulnerable to world monetary system 
upheavals as the dollar, yen, DM and £ sterling are 
now. It would also be the object of speculation on the 
world's foreign exchange markets. On the other hand 
the European Community would be able to make a 
bigger contribution than before to improving the inter­
national monetary order by its presence in international 
organizations such as the International Monetary Fund 
because the ECU would then have an important and 
increasingly influential role to play. There might of 
course be a tendency to overvalue the ECU on the 
world's foreign exchange markets, with the result that 
Community exports to third countries might be dearer 
and harder to find markets for, but this problem could 
be tackled within the framework of a common 
exchange-rate policy vis-a-vis currencies of third 
countries (cf. point 3.6.2). 
5.6.6. With their central banks all Member States 
should participate in the work of the ESCB, the latter 
being responsible for regulating the ECU money supply 
and formulating a common monetary policy. Adjust­
ments of the pivotal rates of currencies not linked by 
irrevocably fixed parities would have to be decided by 
the governments concerned in agreement with the ESCB 
and the ECOFIN Council. 
Done at Brussels, 27 February 1991. 5.6.7. With all Member States a) coordinating their 
economic and budgetary policies (including the multi­
lateral surveillance thereof) and b) participating in the 
ESCB and its common monetary policy, further pro­
gress towards the convergence of economies could be 
made in the third stage (and not in a brief second stage) 
and after a core of particularly stable EC currencies 
had adopted irrevocably fixed exchange rates, thereby 
attaining 'full' monetary union. 
5.6.8. The ECU would be used increasingly as a 
parallel currency, both in countries where an exchange-
rate risk existed vis-a-vis the national currency and in 
the 'core countries' of the monetary union where no 
such risk would exist. The wider acceptability of the 
ECU would also be promoted by its use as a loan 
currency. Industry and the general public throughout 
the Community would thus become more and more 
familiar with the ECU, a process which would be helped 
if prices as well as wages and salaries were denominated 
in both currencies during the period when the ECU 
circulated in parallel with the national currency. 
5.6.9. The ECU could become the sole European 
currency once all the national currencies had joined the 
stable-currency group, i.e. when their parities—after a 
transitional period for occasional exchange-rate adjust­
ments—were also irrevocably tied to the ECU. Individ­
ual currencies could join this group one after another 
and without any dramatic deadlines being set, as when 
currencies gradually joined the exchange rate mechan­
ism. This would also satisfy the provision of the newly 
proposed Article 109H(3) of the EEC Treaty stipulating 
that neither transition to irrevocably fixed exchange 
rates nor the introduction of the ECU can be prevented 
by individual Member States benefitting from dero­
gations. 
The Chairman 
of the Economic and Social Committee 
Francis STAEDELIN