Werner plan

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Price increase in the EC member states from 1970 to 1980

The Werner Plan was presented in 1970 by a commission of experts headed by then Luxembourg Prime Minister Pierre Werner , which was set up at the 1969 Summit in The Hague . It planned to set up a monetary union in the then European Community and to introduce a single currency by 1980 . But the Werner plan was probably too far ahead of its time and failed. A major factor in this was that with the collapse of the Bretton Woods system - as a result of Nixon's monetary policy and the crude oil crisis in 1971 - the international monetary system was completely in upheaval. In the first stage of the Werner Plan (January 1971 to December 1973) the coordination of economic policy and also that of monetary and credit policy was to be strengthened. The liberalization of capital movements should also be accelerated. In addition, initial measures to solve structural and regional problems and a harmonization of taxes were planned.

A core dispute broke out between economists and monetarists . The former envisaged first coordinating economic policies (especially Germany and the Netherlands), the latter aimed at currency coordination (France, Belgium, Luxembourg). The Werner Plan recommended a parallel approach. On March 22, 1971, the Council agreed on the gradual implementation of Economic and Monetary Union (EMU). As mentioned, the entire project failed due to the catastrophic framework conditions. Only one European exchange rate union (currency snake) survived the crisis. In the end, only the Federal Republic of Germany, the Netherlands, Belgium, Luxembourg and Denmark were involved in the “currency bloc”, which allowed exchange rate fluctuations between the participating currencies only within narrow limits. The other EC countries had left because the value of their currencies fell so quickly that they could not maintain stable exchange rates. It was not until 1979 that a third attempt was made with the European Monetary System (EMS) to achieve close economic and monetary policy cooperation in the EC. The European Economic and Monetary Union (EMU) was finally introduced gradually from 1990, the euro as the common currency in 1999.

literature

  • Alfred Steinherr (Ed.): 30 years of European monetary integration. From the Werner Plan to EMU. Longman, London et al. 1994, ISBN 0-582-24357-2