Stanley's blog

A European Monetary Fund

An objective of the Maastricht Treaty was EMU – Economic & Monetary Union. 16 countries have achieved monetary, but not economic, union. Indeed, even economic policy cooperation still leaves a lot to be desired. The original criticisms of the euro were the lack of economic coordination and the absence of any central fund. Greece has brought these issues to a head. The situation in Greece is manageable because of the smallness of its economy but Italy, Portugal and Spain are in the background.

There is growing support (beginning in Germany and France) for a European Monetary Fund.

If agreement could be reached, it would appear to require treaty changes, and it is unimaginable that these could be agreed by the 27 Member States. The immediate question to address is whether the desired result can be achieved without changing the present treaties. Would a new treaty between the 16 eurozone members be a workable solution. Could this be achieved by using the “enhanced cooperation” provisions of the present treaties? Particular attention must be paid to the constitutional position in Germany.

A clear account of the present situation is to be found on today’s EurActiv website.

Author :


  1. How about being pragmatic on this, like in most cases in EU integration? You put the right questions, Stanley, like usual.

    Most EU institutional development started…as pilots outside the institutionnal framework. At global level also, btw: see G7, G8, now G20, without any legal basis. So, even before a traité à 16, the very existence of political will behind such a scheme – if so – would send strong signals.

    After all, even the IMF is not first of all a balance sheet, but a tough and legitimate ‘turn around’ consultancy. And a ‘labelling’ organisation, bringing credibility to a country P&L restructuring, and helping it go back to the market.

    Talking of markets: shouldn’t large banks be somehow associated? (not in decision seats, but in a related club of ‘lenders of first resort’?)

    In practice: I think a group of top experts like Daniel Gros of CEPS should meet Van Rompuy & Trichet & Junker, be tasked by the Spring Summit on 26 March to make a proposal by end May, for political support at a Euro-group meeting before the June Summit. A bit like the Delors group in its day re: the single currency, a much greater endeavour.
    I would not be surprised if such a group would also comment on the first case at hand, Greece, and have a constructive effect already this year.

    And Stanley could certainly help, at least on on the process…

    Christophe Leclercq
    (a non expert in these matters, like in most, except perhaps what I write here: )

  2. Christophe: Yes, we must start with political will. Berlin has it, despite Frankfurt (Bundesbank). The Germans, undiplomatically, did not consult with the French before launching the idea of an EMF. But Paris is likely to show political will. Whether the two countries can agree the details is another matter. If they can, I’d expect the Eurozone 16 to go along with it.

    I too am not a monetary expert but it would be good to commission an independent report.

Comments are closed.