The long march to European monetary integration

Abstract

EU central bankers were strengthened as a ‘professional’ network by the negotiation of EMU [Economic and Monetary Union] … The new institutional framework of the ESCB [European System of Central Banks] provides them with more than just a new formal role to play … it is sociologically important in offering EU central bankers a new European identity within which that role is acted out. Kenneth Dyson (2000: 72) Together, national central banks have a powerful voice at the ECB – 11 of the 17 seats on its decision-making council – but the Bundesbank has just one, no more than the Irish. When the [Bundesbank's] board met last week, the press barely noticed. Contrast that with previous meetings, when journalists and economists pored over every comma. The Economist (1999: 86) The seminal event in the central banking world at the close of the twentieth century was the creation of the European Central Bank (ECB) and the establishment of a new currency called the euro. While the ECB was not the first supranational central bank – the Austro-Hungarian central bank (1878–1919) and the central banks of the CFA Franc zone take precedence – it was from the outset an institution of far greater significance. Monetary union was not an aspiration of European central bankers until the late 1980s, when the European political and bureaucratic elite finally succeeded in harnessing them to the integrationist chariot. Ultimately, the formation of the ECB conferred enhanced power and prestige on some, though not all, European central bankers.