The European Monetary Union in transition

This paper critically reviews the evolution of European monetary integration. It focuses on the Delors Report which has led to the Maastricht Treaty and the framework for monetary union by 1999. Experiences from the implementation of the Maastricht Treaty are reviewed and the rationale of monetary union is discussed. Finally, some lessons from the operation of the international monetary system in contrast to the European Monetary Union movement are presented. One natural conclusion seems to be the reality that both systems are evolving and although we may be a little far from the ideal of a total European Monetary Union (EMU) with one currency for the one market of the EU, the managed float has taught us that world trade can continue to grow despite the current imperfections of the international monetary system.