The First Steps to European Monetary Co-operation, 1968 to 1981

Abstract

Different French governments supported European monetary cooperation, and even integration, from the nineteenth century. The French sought the creation of the Latin Monetary Union in 1865 for a combination of economic and political reasons which included the rise of Prussian economic and military power (Dyson, 1994, pp. 26–8). While seriously disrupted in 1878, the Union continued formally until March 1929. After World War II, the European Payments Union was a successful form of monetary co-operation, essential for French and European reconstruction and economic growth and an important step towards improved economic co-operation (Lynch, 1997, pp. 122–5). During the 1950s, the French did not see the co-ordination of member state economic and monetary policies as a crucial factor in the establishment of the Common Market. The French and the other Community member states believed that the successful functioning of the IMS throughout the 1950s made efforts at the European level unnecessary. Moreover, the French supported the general consensus that existed on monetary policy in favour of international co-ordination and against European level co-ordination which would have excluded the dollar and pound (Tsoukalis, 1977, p. 51).