Payments Union Research Articles

ROBERT TRIFFIN, JAPAN, AND THE QUEST FOR ASIAN MONETARY UNION

Especially with the Asian financial crisis of 1997–98, Asian countries have advocated a profound reform of the international financial architecture. Their proposals focused on two main axes: a reform of the global financial system, and stronger regional monetary integration in Asia. There are here significant parallels with the ideas of Robert Triffin (1911–1993). Triffin became famous with trenchant analyses of the vulnerabilities of the international monetary system. The Triffin dilemma is still present among international monetary policy-makers, also in Asia. Triffin put forward several proposals for reforming the global monetary system, but he also developed proposals for regional monetary integration. These were very much based on his experience with the European Payments Union, and focused on the creation of a (European) reserve fund and a (European) currency unit. In this paper we focus on Triffin’s proposals for an Asian payments union in the late 1960s, giving special attention to Japan (in Triffin’s time, the biggest Asian economy; moreover, Triffin had an important Japanese network).

ЕВОЛЮЦІЯ БАНКІВСЬКОЇ СИСТЕМИ ЄВРОПЕЙСЬКОГО СОЮЗУ

The European banking system, established in the first postwar years, is the result and at the same time one of the important instruments of European integration and the European Monetary System. The creation of an effective banking system required not only radical changes at the legislative level of the countries that were part of the monetary union, but also the adoption of uniform requirements by all member countries. The article considers and generalizes the issue of paradigmatic standards of transformation of the European banking system. The purpose of creation of the European payment union is substantiated. The analysis of the mechanism of functioning of the European Payments Union is carried out. The reason for the creation of the European Coal and Steel Community is named. The activity and consequences of the formation of the European Economic Community are studied. The main idea of "Werner's plan" is described. The reasons for preventing the activation of the "Werner plan" are named. The consequences of the abolition of the US gold standard are highlighted. The essence of the "snake in the tunnel" is described. The reasons for the creation of the European Monetary System are named. The main elements of the European Monetary System are considered. The pros and cons of the formation of this system are summarized. The grounds for the formation of a monetary and economic union are substantiated. An analysis of the creation and operation of the Maastricht Treaty. The basic principles of the Maastricht Treaty are named. The main tasks of the European Monetary Institute are highlighted. The criteria for the participation of countries in the monetary and economic union are considered. The stages of formation of the European system of central banks are named. The activity of the European Central Bank is described. The shares of national central banks in the capital of the European Central Bank are highlighted. The main economic and political reasons for the adoption of the term "Eurosystem" by the Board of Governors are named. The structure of the Eurosystem is analyzed. The main elements of the banking union are generalized. The pros and cons of "emergency liquidity" measures in the Eurosystem are highlighted. The activity of the trans-European system of automatic transfers of gross settlements in real time – TARGET is characterized. The essence of the concept of "financial stability" is generalized.

A multilateral payments union for Eastern Europe? A comment

The work is a critique of P. Bofinger’s “A multilateral payments union for Eastern Europe?” in which the author highlights some of the critical issues that Bofinger belittled or ignored. JEL: P20, F33

A multilateral payments union for Eastern Europe? A reply

A brief response to J.M. van Brabant’s critique of “A multilateral payments union for Eastern Euro?”

A multilateral payments union for Eastern Europe

This paper attempts to assess the advantages and disadvantages of a payments union for the Eastern European member countries of the former Council for Mutual Economic Assistance (CMEA). The main question is whether CMEA countries should be subject to a ‘shock’ therapy of rapid liberalisation or whether a more gradual approach with restricted convertibility would be advisable. The author analyses the case for multilateralism versus bilateralism and proposes a tentative partial compromise solution.

From Common Market to EMU: a Historical Perspective of European Economic and Monetary Integration

This paper traces the history and the institutional background of European integration to the establishment of the economic and monetary union in the European Union (EU). After the establishment of the European Economic Community (EEC) in the late 1950s, attempts at monetary integration, and ultimately monetary union, tended to assume importance only as a result of financial crisis and then returned to being a vague objective as soon as the crisis recedes. In recent years, however, monetary integration has assumed greater urgency. Economic union, on the other hand, has followed a smoother transition. Economic integration was used after the Second World War to realize political goals, chiefly to anchor West Germany within the western European alliance. Since that time the economies of member states have slowly integrated. The economic environment of the 1950s is a far cry from the integrated community of today. In the 1950s European currencies were not convertible and domestic trade was highly protected. Intra-European trade was based on bilateral clearing arrangements institutionalized by the European Payments Union. Today EU currencies are fully convertible; capital controls, intra-EU tariffs, and quotas have been eliminated; and the single market has been completed. Monetary union has gone through a number of stages. The Werner Plan of the early 1970s, which set the goal of economic and monetary union by the end of the decade, was only partially implemented. Its failure can be put down to unfavorable international economic conditions and poor institutional structures. In the early 1980s a new monetary initiative, the European Monetary System (EMS), was launched. It struggled through its initial phase until it was replaced by the current euro arrangements. These successive stages ultimately culminated in the Maastricht Treaty, which laid out a precise path and timetable for economic and monetary union.

The CIS payments union: A post-mortem

The CIS payments union: A post-mortem

Convertibilité et spécialisation internationale dans les économies est-européennes en transition

Convertibility and international specialization in East European economies in transition. In the Central and East European economies in transition, internal convertibility for routine transactions, and the restructuring of trade, are mutually linked. The return to convertibility affords the opportunity to decide which forms of production are profitable, on the basis of world prices, and points the way for the future specialization of East European economies. The choice of a speedy convertibility and the refusal to create an East European payments union have speeded up the geographical restructuring of trade. In the short term, the specialization which the countries of central and eastern Europe inherited from the past conditions the choice of exchange rate level after the reintroduction of convertibility. Basing itself upon the example of the German monetary union, on the present structure of East European exports, on the prospects for convergence in respect of the States of the European Union, and on the clash between stabilization and restructuring, the article supports an undervaluation of the real rates of exchange at the beginning of the transitional period. In the longer term, as reforms are initiated and a new specialization develops, it would on the other hand be desirable for the actual exchange rate to appreciate, and to approach a level corresponding to the parity of purchasing power, thus allowing for some improvement in the living standards of the citizens of Eastern Europe.

A Payments Mechanism for the Former Soviet Union: Is the EPU a Relevant Precedent?

European Payments Union Barry Eichengreen Trade between the republics of the former Soviet Union (FSU) is imploding. One feasible direction for progress is the restoration of a mechanism of multilateral settlements for trade between the republics. The European Payments Union of the 1950s is often invoked as a model. To evaluate this proposal, I distinguish a clearing union without temporary credits, a payments union with credits, and full convertibility on current account. The last two have very similar macroeconomic consequences, but both require prior macroeconomic stabilization. Since this has yet to be achieved within the former Soviet Union, the current attempt to implement an EPU-style payments union with credits is unlikely to succeed. In postwar Western Europe, stabilization had already been accomplished by the start of the EPU. Moreover, the significance of the EPU went way beyond provision of multilateral clearing. It was a commitment mechanism that helped to cement both the domestic bargain between capital and labour and the international bargain to move towards freer trade and greater European integration. Nothing similar applies within the former Soviet Union, for which the EPU is not a helpful precedent.

The evolution of east-west trade and the role of the Ecu in Eastern Europe

This paper arrives at the conclusion that the expanding European Community is a dominant attraction for Eastern Europe, including the former USSR. Since the Community will have privileged trade arrangements with most, if not all, of Eastern Europe, optimal monetary solutions will be strongly influenced by trade relations. The future Western European currency therefore, is also playing a dominant role in the monetary choices of Eastern Europe. We have discussed several aspects of this choice (anchor of the exchange rate regime, management of foreign reserves, parallel currency and currency of a possible payments union) and conclude that the Ecu is the dominant contender.

Key problems of creating a central European payments union

The paper analyses the pros and cons of assisting Eastern European countries with some payment facility in their transition to market system over the next few years. The rationale underlying scheme, as well as the varied criticism such proposals have elicited are provided. The author presents the arguments for coming to grips with the prevailing and emerging external-payment constraints of the reforming countries, the original proposal for a payments facility, and some concrete data on what precisely will be involved in terms of capital commitments, credit facilities and behavioural constraints under international surveillance.

Transitional Arrangements for Trade and Payments Among the Cmea Countries

Trade among the CMEA countries will soon be conducted at world prices and in convertible currencies. These are crucial steps in economic reform but will worsen Eastern Europe`s terms of trade and drive it into current account deficit with the USSR. Proposals have been made for a payments union, resembling the European Payments Union of 1950-1958, to ease the transition. But it would not be very helpful if confined to the countries of Eastern Europe and would not function well if it included the USSR, which would be a persistent creditor. Other ways must be found to deal with the transition.

L'aide aux pays de l'Est : les leçons du plan Marshall

It has recently been argued that the post-war Marshall Plan experience could be repeated for the Eastern countries now. Against this, recent historical studies have shown that the Marshall Plan was less effective than it has been claimed and should not therefore be used as a justification for economic aid to the East today. We compare the situation of Western Europe at the time with the current one in Eastern Europe from the point of view of the physical states of the economies, the attitudes to economic policy, the problems of internal stability and of external trade and payments. In particular, we look at the process of transition to control-free economies with externally convertible currencies. We come to two principal conclusions. Firstly, while the productive sector of Western European economies was probably already on the way to recovery, this is not true in the East today. The case for aid for reconstruction is therefore stronger than it was then. Secondly, the political will, coupled with a natural economic tendency to reach regional economic integration, allowed Western at the time to achieve a gradual transition to multilateral payments convertibility through the succesful creation of a payments union. However, the conditions for such a choice do not seem to be present Eastern Europe today. However, the alternative route of a direct passage to convertibility is likely to produce an unstable situation there is a substantial external injection of liquidity.

The Legal Regulation of the European Currency Unit

EVEN though neither economic and monetary union, nor the concomitant immutable parity rates or sole Community currency envisaged 17 years ago by the Werner Committee,' have yet been achieved, nevertheless the European Communities have from the outset required their accounting unit, quite apart from the pivotal role of the modern European Currency Unit (ECU) in the European Monetary System. The problem was recognised in the old Coal and Steel High Authority's Decision No.2 of 13 December 19522 dealing with the levy payable under that Treaty. Article 50(2) of the Coal and Steel Treaty provided that the levies should be assessed annually on the relevant products according to their average value, and what the High Authority decided to do was in fact to fix a levy in units of account, these being units of account of the European Payments Union established in 1950. The effect, at least in theory, of using the unit of account was that the High Authority could fix a flat-rate levy which should be the same in real terms irrespective of where in the Community the products originated, and irrespective of the currency used in any actual transaction. The levy under Article 50(2) of the Coal and Steel Treaty was, of course, intended as the own resource of the coal and steel budget, and the budget of the European Communities which we now have, and which in fact excludes the coal and steel operational budget,3 is itself always drafted in terms of units of account.4 Indeed, units of account are used not only in the budget itself, but also in relation to funds falling outside the scope of the budget as such. So, for example, successive European development funds, created originally for the benefit of those countries associated with the Community under Article 131 of the EEC Treaty, with subsequent European development funds being created for the

A Review of Regional Economic Integration in Africa with Particular Reference to Equatorial Africa

THE history of regional economic integration in should start from the signing of the Agreement of Co-operation between the Organisation of African Unity and the United Nations Economic Commission for Africa on 15 November 1965 in New York. However, the Economic Commission for Africa, which is a creature of the Economic and Social Council of the United Nations, is a specialised agency of the UN which predates 1965. It was established in 1958. By 1965, the Commission had fully established itself, decentralising its presence beyond its headquarters in Addis Ababa. By 1963 it had opened two regional offices, one in Niamey (Niger) and one in Tangier (Morocco). It also had an administrative outpost by 1963 in Lusaka (Zambia). Its vista of operation had expanded into a number of fields necessitating the opening of such institutions as the Land Policies Development Centre for East and Central (1960) and the Agricultural Credit Centre (1962). In its report for the fifth year of its operation (1963), the Commission declared its readiness to embark on regional economic development schemes. Particular emphasis was laid on its interest in the establishment of an African common market, the creation of an African payments union and the co-ordination of national development plans. The Commission was deeply concerned with concerted efforts in regional economic development and the need to regionalise the integration of African economies. Two major projects of the Commission are the African Institute for Economic Development and Planning in Dakar, and the African Development Bank in Abidjan. Both projects have been conceived as regional projects and in their respective spheres of activity these projects were intended to contribute to a closer regional co-operation in the economic pursuits of African nations.1 The Charter of the African Development Bank is clear as to its aims at

The European Monetary Agreement, The European Payments Union, and Convertibility

The Journal of FinanceVolume 12, Issue 3 p. 333-347 Article THE EUROPEAN MONETARY AGREEMENT, THE EUROPEAN PAYMENTS UNION, AND CONVERTIBILITY Dallas Jones, Dallas JonesThe author, a Department of State Foreign Service Officer, completed this paper during an assignment as a Foreign Service Institute Fellow at Yale University. The views expressed are his own and should in no way be taken as necessarily reflecting those of the Department of State or the Foreign Service. The author wishes to state that to an unusual extent he is indebted for guidance and suggestions to Professor Robert Triffin of Yale University, who, however, should not be considered responsible for the final paper.Search for more papers by this author Dallas Jones, Dallas JonesThe author, a Department of State Foreign Service Officer, completed this paper during an assignment as a Foreign Service Institute Fellow at Yale University. The views expressed are his own and should in no way be taken as necessarily reflecting those of the Department of State or the Foreign Service. The author wishes to state that to an unusual extent he is indebted for guidance and suggestions to Professor Robert Triffin of Yale University, who, however, should not be considered responsible for the final paper.Search for more papers by this author First published: September 1957 https://doi.org/10.1111/j.1540-6261.1957.tb04142.xCitations: 1 Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Citing Literature Volume12, Issue3September 1957Pages 333-347 RelatedInformation

Organization for European Economic Cooperation

European Payments Union: On June 30 the Council of EPU decided that the organization should continue for an additional year in accordance with Article 11 of the agreement. Special arrangements had to be made with the Belgian-Luxembourg economic union and with Portugal to settle surpluses beyond their respective quotas up to June 30, 1952. The settlement with the Belgian-Luxembourg economic union consisted of a payment by the union of $80 million in gold as part repayment of the credit and, on the part of the Belgian-Luxembourg economic union, a supplementary tranche beyond her creditor quota of 85.2 u/a settled as 42.6 million in gold and 42.6 million in credit. After the various adjustments, the cumulative accounting surplus of the Belgian-Luxembourg economic union came to 415.8 million u/a of which 33.6 million were within the quota and 85.2 million were beyond the quota. In the case of Portugal, the union waived its rights to recover $3 million in gold and the Portuguese accounting surplus was reduced to 15 million u/a settled as to 6 million in gold and 9 million in credit.

E.P.U. problems

In the present article Dr. Guido Carli, chairman of the European Payments Union Managing Board, summarises the core of his observations on the union’s problems in the following conclusions: (a) within the present E.P.U. Agreement, a combination of credit and debit positions may arise which would exhaust the dollar assets and therefore terminate the working of the institution; (b) the situation could be redressed by decreasing quotas, by altering the dollar-credit ratio within the quotas, by contributing an additional supply of dollars. This fresh contribution is liable to come either from participating countries or from U.S.A.; but as all participating countries are running a dollar deficit a contribution of theirs would increase this deficit; (c) whatever device under (b) be accepted, it would be insufficient to restore normal working conditions in E.P.U. if participating countries did not pursue economic and monetary policies calculated to bring about equilibrium of their balances of payments.