THE ASSESSMENT: THE EUROPEAN INTERNAL MARKET: THE NEXT STEPS

Abstract

The Treaty of Rome envisaged the creation of the common, internal market between the member states of the European Community. Progress to wards this goal has been slow, punctuated by sudden bursts of activity. After the expiry of the deadline for the 1992 programme, 1993 may mark the beginning of a prolonged pause, or it may provide the impetus towards full economic, mon etary, and political integration. At the time of writing, the Treaty on European Union (the Maas tricht Treaty), the product of the French initiative to bind a unified Germany into the European economy, has not yet been ratified in all EC member coun tries. The second Danish referendum is outstand ing, as is completion of the ratification process in the UKparliament. The Exchange Rate Mechanism (ERM) has come under severe pressure, with the suspension of UK membership and a series of devaluations. In short, monetary integration ac cording to the Delors programme seems more remote now than at any time since the UK joined the ERM: stage n is extremely unlikely to begin on 1 January 1994.2 The main cause of these difficulties has been German reunification. High German inter est rates have not only undermined currency pari ties; they have also exacerbated recession across the Community. This shock to the European Commu nity will take several years more to work through.