Question

“In the 1950s Jacques Rueff, a leading French economist declared that ‘Europe will be made through a currency, or it will not be made’.”(p.6) What have been the flaws found in the single currency of the European Union as an instrument of integration and what are the underlying tensions hobbling its use as an instrument for deeper integration?

Answer 1

The French president, Francois Mitterand , accepted German unification and in exchange the German chancellor , Helmut Kohl, agreed to give up the D-mark for the Euro. In fact money was crucial from the very start of the European project. In the 1950s Jacques Rueff , a leading French economist, declared that "Europe will be made through a currency , or it will not be made. " After the break -up of the Bretton Woods International Monetary system in 1971, European countries made many attempts , usually in vain, to ensure currency stability through such arrangements as the " snake", the European monetary system and the exchange-rate mechanism .

A move to a single European currency may have seemed a logical extension of such efforts, yet it was far more momentous. However fixed an exchange-rate arrangement pretends to be , it can be altered at any time. Indeed, that is what happened repeatedly in the 1980s and 1970s. The point of the single currency was to put an end to such disruption. By launching the Euro in 1999 and replacing national notes and coins in 2002,the EU was not just underpinning the single European market, it's most successful project. It was also taking a giant leap towards deeper political and economic integration.