No C 178/46* Official Journal of the European Communities 15. 7. 82 
Opinion on the development of the European Monetary System 
A. LEGAL BASIS FOR THE OPINION 
At its 196th plenary session held on 24 March 1982 the Committee, acting on a propo­
sal from the Bureau, decided to deliver an opinion on the abovementioned subject on 
its own initiative. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 
197th plenary session held in Brussels on 28 and 29 April 1982. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the Treaty establishing the Euro­
pean Economic Communit), and m particular 
Article 198 thereof, 
Having regard to the Commission's communication 
to the Council entitled 'The Development of the 
European Monetary System', and in particular the 
draft resolution attached, 
Having regard to the decision taken by its Bureau 
on 23 March 1982, and confirmed by the plenary 
session on 24 March 1982, authorizing the Section 
for Economic and Financial Questions to draw up 
an own-initiative opinion on the subject, 
Having regard to its opinion on 'the Community 
approach to the present international monetary dis­
order' adopted at its plenary session of 20 and 
21 June 1978 0), 
Having regard to its opinion on the proposal for a 
Council Regulation setting up a European Mone­
tary System adopted at its plenary session of 29 and 
30 November 1978 (2), 
Having regard to the oral report made by the rap­
porteur, Mr Evain, 
Having regard to the discussions of the Section for 
Economic and Financial Questions at its 70th meet­
ing held on 20 April 1982, 
(») OJNoC283,27. 11. 1978. 
(*) OJ No C 105, 26. 4. 1979. Having regard to the discussions on 29 April 1982 
during the 197th plenary session, held on 28 and 
29 April 1982, 
HAS ADOPTED THE FOLLOWING OPINION 
with 78 votes to 1, with 8 abstentions: 
1. The Committee has always given its support to 
the aim of creating a monetary union. In an opinion 
of June 1978 it dealt with monetary problems at 
Community and world level. In November 1978 it 
approved the plan for a European monetary system 
put forward at that time by the Commission which 
led, in December 1978, to the setting-up of the 'sys­
tem' by the European Council. 
2. The Committee notes that the new draft resolu­
tion submitted to the Council by the Commission 
represents a further step forward towards a common 
economic and monetary area. Sad to say, conditions 
at present do not allow the Community to move on 
to the institutional stage of the system. In the mean­
time, however, steps must be taken to promote all 
measures likely to strengthen the EMS in practice. 
More than ever, businessmen — who are expected 
to create jobs — need 'risk reducing factors' ena­
bling them to make reasonable forecasts on which to 
base their investments. 
3. The Community's monetary system has so far 
played an effective role here, even if the ambitious 
targets set at the beginning of the 1970s (i.e. full 
monetary union by 1980), have not been achieved. 
Despite the oil shock and the violent fluctuations in 
15. 7. 82 Official Journal of the European Communities No C 178/47 
exchange rates and interest rates in the world, an 
appreciable degree stability has been ensured for the 
parities of the EMS currencies against each other. 
The parity adjustments which have proved neces­
sary have been moderate and carried out coolly. 
Very short-term cooperation between the central 
banks has been enough to ensure that the system's 
operational requirements are met. The fact that par­
ity changes are now negotiated and are the result of 
a consensus within the EMS signifies a fundamental 
shift in government attitudes which would have 
been inconceivable even ten years ago. 
4. However, the EMS is now facing its biggest 
challenge since its creation. Of the, economically 
speaking, most important countries in the EEC, two 
(France and Germany) are currently pursuing differ­
ent policies and the third (the United Kingdom) has 
not so far felt that the right time has come to join 
the System. 
The growing pressure exerted on governments by 
the recession and unemployment — governments 
which may in any case have different policy options 
— tends to increase the divergences between 
national economic policies. External factors (move­
ments of exchange rates and interest rates) act in the 
same way. This may have a devastating effect on the 
whole Community economy, especially the common 
agricultural policy. One result, certainly, is the lack 
of a counterweight to the dominance of the dollar. 
Convergence 
5. The Commission's proposals are a positive ini­
tial response to the problems involved in strengthen­
ing the EMS. But they would not be enough to avert 
the disintegration of the common market itself if the 
participating countries did not agree to exercise the 
discipline necessary to avoid major divergences in 
cost and price trends. 
Exchange rate adjustments would then have to be 
made more and more frequently and the whole 
EMS would become pointless. 
6. The Committee therefore attaches particular 
importance to those Commission proposals 
designed to bring about a greater convergence of 
monetary and economic policies. The proposals in 
question are set out in Chapter 3 of the Council 
resolution. But, above all, it is up to the govern­
ments to act here. The Community's associated bodies are trying to 
strengthen consultation procedures. Experience has 
shown that in many cases the pressure exerted on 
governments' behaviour through these channels is 
far from negligible, because of the very existence of 
the system. 
But as things stand at present as regards European 
integration, there are not, nor can there be, any mea­
sures to force the Member States to align their poli­
cies. 
7. It is also noted that, even as regards the simple 
formulation of objectives or the observation of 
results, it has not always been possible to agree on 
methods which, if not common, are at least suffi­
ciently harmonized to enable reliable comparisons 
to be made. It is, however, essential to make pro­
gress in these areas, if the real situation is to be sized 
up more accurately. 
Public use of the ECU 
8. The two measures proposed by the Commission 
for securing wider use of the ECU by the central 
banks (raising of the ECU acceptance limit from 
50% to 100%, open access to the very short-term 
financing facility for intra-marginal interventions in 
Community currencies) should help technically to 
improve the operation of the system — at least in 
the short term. They are not able on their own, how­
ever, to bring about a lasting consolidation of the 
EMS. The proposed measures also have the advan­
tage of giving the ECU a status in the 'public' net­
works close to that of the other currencies. This 
would seem all the more justified, since, in relation 
to most of the Community currencies, the ECU has 
so far shown itself to be more stable than gold or the 
dollar. 
9. While it is up to the monetary authorities to 
appraise this adjustment of the machinery and the 
compensatory arrangements proposed (ceiling on 
allocations, conditions governing the remuneration 
of positions, etc.), they should do so bearing in 
mind the economic and social advantages that will 
result for the Community from a strengthening of 
the solidarity between the participating countries. 
10. Although the Commission proposals are pri­
marily technical in kind, it goes without saying that 
in reality their implications are largely political. 
Private use of the ECU 
11. The gradual and partial replacement of 
national currencies by the ECU in contracts or in 
accounts opened by businessmen, is also likely to 
NoC 178/48 Official Journal of the European Communities 15.7.82 
consolidate the economic integration of the EEC. 
Use of the ECU, however, cannot be decreed; it can 
only stem from the agreement of the parties con­
cerned and the judgement of the market, the aim 
being the convertibility of the ECU. 
At the present stage, however, the only thing the 
ECU used by private businessmen has in common 
with the ECU used officially by central banks is the 
definition of the basket of currencies used in calcu­
lating the ECU — and even this definition is liable 
to change. The ECU is generally used only via these 
basket currencies, and in most cases these currencies 
alone are used in settlements. 
Furthermore, any single currency in the basket is the 
national currency of the individual user, all other 
currencies being foreign currencies which are, more 
often than not, subject to different regulations. Pro­
hibitions of, or restrictions on, the use of currencies 
therefore tend to accumulate. 
For the private user, therefore, the ECU is still not 
easy to use and is relatively expensive. The Com­
mittee therefore approves any steps by the EMS 
itself and by Member States to clarify and standard­
ize the conditions of use of the ECU. 
The external relations of the System 
12. So far, the EMS has played a positive role in 
so far as the participating countries have managed 
to create a zone of stability between their respective 
parities at a time when the exchange rate between 
the ECU and the main international currency, the 
dollar, has varied by more than 40% (measured 
against the ECU, there is a 48 % difference between 
the highest (8 January 1980) and lowest (10 August 
1981) dollar rates). 
Done at Brussels, 29 April 1982. 13. A merely technical reinforcement of EMS 
machinery will not be enough to ensure greater 
European independence from US policy. There is 
no agreement between the Member States on the 
basic measures necessary to ensure such indepen­
dence. Moreover, account must be taken of the soli­
darity which exists, and which is vital, within the 
western world. 
14. The Commission's proposals to strengthen 
consultation between the Community and US and 
Japanese authorities are therefore a good move. 
While the system's external relations are at present 
basically a matter for the national monetary 
authorities, it is now time to develop several ways of 
making joint representations to the United States. 
15. The Commission is proposing the setting-up of 
a single credit line between the FED and FECOM 
and the granting of authorization to FECOM to 
issue ECUs to non-EMS central banks in return for 
reserves brought in. 
Here too it is up to the monetary authorities to give 
a ruling on the technical aspects and the desirability 
of this proposal. Subject to this proviso, the Com­
mittee thinks it is desirable for central bank inter­
ventions, in third-party currencies to be coordinated 
as much as possible. Such a policy should enable 
more effective action to be taken as regard 
exchange-rate relationships and interest rates in the 
Community. 
16. The Section feels that steps should be taken to 
ensure that no misunderstandings of illusions arise 
about the exact scope of the EMS, its instruments or 
its techniques, or about the results to be expected 
from it. Anything that may help businessmen and 
the general public to be better informed on the 
EMS, and especially its effects on the economic and 
social situation, and on employment, must therefore 
be encouraged. 
The Chairman 
of the Economic and Social Committee 
Tomas ROSEINGRAVE