Principles, Values and Challenges for a Europe Built through Currency

At the Hague Summit (1–2 December 1969), the decision was taken to explore the possibilities of progress towards an economic and monetary union. An ad hoc committee of experts was set up and, at the request of the EC Council, Pierre Werner (Prime Minister and Finance Minister of Luxembourg) was chosen as chairman. The work of this committee began on 20 March 1970 and resulted in the Werner Report - presented on 8 October in Luxembourg.

The Werner Report offered a full definition of EMU, which was to be established in three stages over a decade (1971–80). The ultimate aim was to achieve irreversible convertibility between the currencies of the Member States, the complete liberalization of capital movements, the irrevocable fixing of exchange rates, and even potentially the replacement of national currencies by a single currency as a natural and desirable further development of monetary union. From an institutional viewpoint, the report called for the creation of two new steering bodies: a ‘centre of decision for economic policy’, independent of governments and placed under the democratic control of the European Parliament, to be elected by universal suffrage; and a ‘Community system for the central banks’. Also, EMU would serve as a ‘leaven’ for the development of a political union. Two main principles underpinned the Werner Report: gradual realization of EMU (a step-by-step approach); and parallelism between economic convergence and transfer of powers to the supranational level. The Report ran into a series of international crises (which led to the collapse of the IMS), culminating to its de facto suspension in 1974. Three decades later, the Delors Report was to give the Werner Report the credit due to it, by appropriating its overall philosophy and structure. Both reports define monetary union in almost identical terms, but in some respects the Werner Report goes further and is more clear cut than the Delors Report.

This paper aims to analyze why the Werner Report marked a crucial stage in the process of European integration and was offered, through its principles, values and ideas, a blueprint of EMU in the EU.