European Monetary Union and employment: two sides of the same coin

Abstract

According to the Maastricht Treaty (Article 109j), the third stage of European Monetary Union (EMU) is to begin on 1 January 1999 at the latest. With the arrival of the third stage the exchange rates of the participating countries' currencies will be fixed once and for all and a single European currency will be created. The plan is that all national coinage and banknotes should then be converted into coins and banknotes in the single European currency during the first half of 2002. The decision as to which of the European Community countries fulfil the necessary conditions for the introduction of a single currency (including the convergence criteria contained in Article 109j) is to be taken at the beginning of 1998. The remaining Community member countries will be allowed into the European Monetary Union at a later date, as and when they individually succeed in meeting the requirements to this end (according to the regulations laid down in Article 109k, §2). The public debate on European Monetary Union conducted in the run-up to this decision is welcome. To some extent, it is making up for the lack of a detailed public discussion before conclusion of the Maastricht Treaty. However, the debate should be conducted not on a basis of false allegations and under the camouflage of economists' jargon but using sound and relevant arguments.2 This paper sets out to make one such contribution.