The Single European Currency in National Perspective: A Community in Crisis?

226 Pages·2000·21.206 MB·English

by  B. Moss

THE SINGLE EUROPEAN CURRENCY
IN NATIONAL PERSPECTIVE
Also by Bernard H. Moss
THE ORIGINS OF THE FRENCH LABOR MOVEMENT
Also by Jonathan Michie
CONTRACTS, COOPERATION AND COMPETITION: Studies in
Economics, Management and Law (edited with Simon Deakin)
FIRMS, ORGANIZATIONS AND CONTRACTS: A Reader in
Industrial Organization (edited with Peter Buckley)
THE ECONOMICS OF RESTRUCTURING AND INTERVENTION
THE POLITICAL ECONOMY OF SOUTH AFRICA'S TRANSITION
(edited with Vishnu Padayachee)
The Single European
Currency in National
Perspective
A Community in Crisis?
Edited by
Bemard H. Moss
Associate
Institute of European Studies
London
and
Jonathan Michie
Professor of Management
Birkbeck College
University of London
Published in Great Britain by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
A catalogue record for this book is available from the British Library.
ISBN 978-0-312-23031-9 ISBN 978-1-349-62795-0 (eBook)
DOI 10.1007/978-1-349-62795-0
Published in the United States of America by
ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
ISBN 978-0-312-23031-9
The Library of Congress has cataloged the hardcover edition as folIows:
The single European currency in national perspective : a community in
crisis? / edited by Bernard H. Moss and Jonathan Michie.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-312-21531-6 (cloth)
1. Monetary unions. 2. Monetary unions-European Union countries.
3. Monetary policy-European Union countries. 4. Monetary policy
-European Union countries. 5. Money-European Union countries.
6. European Union countries-Economic policy. 7. Europe-Economic
integration. I. Moss, Bernard H. H. Michie, Jonathan.
HG3894.S57 1998
332.4'94-dc21 98-13924
CIP
--------------------
Se1ection and editorial matter © Bernard H. Moss and Jonathan Michie 1998, 2000
Chapters 1,3,7 © Bernard H. Moss 1998,2000
Chapter 2 © Jonathan Michie 1998
Chapters 4-6, 8-10 © Macmillan Press Ltd 1998
First edition 1998
Reprinted (with alterations) 2000
All rights reserved. No reproduction, copy or transmission of this publication may be made
without written permission.
No paragraph of this publication may be reproduced, copied or transmitted save with
written permission or in accordance with the provisions of the Copyright, Designs and
Patents Act 1988, or under the terms of any licence permitting limited copying issued by
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Any person who does any unauthorised act in relation to this publication may be liable to
criminal prosecution and civil claims for damages.
The authors have asserted their rights to be identified as the authors of this work in
accordance with the Copyright, Designs and Patents Act 1988.
This book is printed on paper suitable for recycling and made from fully managed and
sustained forest sources.
10987654 3 2 1
09 08 07 06 05 04 03 02 01 00
Contents
List of Tables VB
Preface and Acknowledgements viii
Preface to the 2000 Reprint IX
List of Contributors X
Introduction 1
Chapter 1. The Single European Currency in National
Perspective: A Community in Crisis?
Bernard H. Moss 8
Part I National Perspectives
Chapter 2. Economic Consequences of EMU for Britain
Jonathan Michie 37
Chapter 3. France: Economic and Monetary Union and
the Social Divide
Bernard H. Moss 58
Chapter 4. Hoist with its Own Petard: Consequences of
the Single Currency for Germany
Jörg Huffschmid 87
Chapter 5. Italy Towards European Monetary Union
(and Domestic Disunion )
Annamaria Simonazzi and Fernando Vianello 105
Chapter 6. State Intervention and the Question of
European Integration in Spain
Miguel Martinez Lucio 125
Part 11 Europe in Crisis?
Chapter 7. Is the European Community Politically Neutral?
The Free Market Agenda
Bernard H. Moss 141
v
vi Contents
Chapter 8. The Economic Limits of European Integration
John Corcoran 168
Chapter 9. EMU and the Democratic Deficit
Bill Morris 181
Chapter 10. Why 'Employability' Won't Make EMU Work
Andy Robinson 191
Name and Subject Index 210
List of Tables
4.1 Export shares of GDP for four leading EC members,
the USA and Japan 91
4.2 Trade balances of four leading EC members in the
1970s, 1980s, and 1990s 91
8.1 Differential pricing in the EU 172
8.2 How Europe's poor pay more for the CAP 173
8.3 Unemployed as a percentage of the civilian labour
force (July 1996) 175
vii
Preface and Acknowledgements
All the material collected together in this book was commissioned
and written specifically for publication here. We are therefore grateful
to the authors for having undertaken this work and for having re
sponded quickly yet fully to all editorial suggestions. Early drafts
of some of the papers were presented and discussed at a confer
ence on 'The Single Currency in National Perspective' held in London
in October 1996. We are grateful to UACES for having hosted
that event. Of course, responsibility for the views expressed in the
following chapters is solely that of the respective authors. We are
also grateful to Linda Auld and Sund er Katwala of the publishers
for the speedy and efficient production of the book.
Bernard Moss would like to add his acknowledgements to Pro
fessors Francis Snyder and Alan Milward of the European Univer
sity Institute in Florence for introducing hirn to the subject, to Drs
Steven Jeffreys, Valerio Lintner, and Amy Verdun for reading por
tions of the manuscript, to the anonymous reader for Contempor
ary European History for comments on an article drawn from material
in this book, and to Rene Mouriaux of CEVIPOF for his insights
and friendship over the years.
Jonathan Michie would like to add his thanks to, first, his col
league and co-author Michael Kitson of St Catharine's College,
Cambridge, for joint work on these and other topics. Chapter 2
draws on some of that work. Secondly, to John Corcoran for having
commissioned a guest lecture on the topic at the University of
Sunderland Business School, the text of which became the first draft
for Chapter 2. Thirdly, to Bernie Moss for having suggested this
book in the first place and subsequently driving the project through
to completion. And fourthly, to Robyn May for assistance in edit
ing the manuscript.
Finally, this book would not have been possible without the love
and support of our families and we would therefore like to add a
special thanks to them; from Bernard Moss to his wife Neysa and
son David, and from Jonathan Michie to his wife Carolyn and sons
Alex and Duncan.
Bernard H. Moss
Jonathan Michie
October 1997
Vlll
Preface to the 2000 Reprint
When the original hardcover edition of this book was published in
1998 before the launch of the euro, its diagnosis may have ap
peared unduly pessimistic and contrary. Other academic discussions
of the EU and the single currency were decidedly upbeat; it was
hard to find an academic economist who was not a euro enthusi
ast. Politically, the only voices of dissent came from the Tory and
extreme Right. British entry seemed a fore gone conclusion.
This paperback edition appears in a rather more troubled world.
The economic problems from preparations for Economic and Mon
etary Union (EMU) have coincided with general global instability.
Throughout the world there is a rising chorus of protest against
the effects of market globalization. One consequence was the elec
tion of a Social Democratic government in Germany that appointed
Oscar Lafontaine as finance minister, ending monetarist hegemony
across member states and questioning the strictures of the Maastricht
treaty.
Economic divergence among member states increased, including
between France and Germany, the leading partners. Once Lafontaine
was eliminated as a critic, the European Central Bank, with an eye
on the faltering German economy as could be expected, lowered
interest rates. This alarmed certain interests, particularly in those
economies like the Irish and Spanish that are growing rapidly. The
folly of one interest rate fitting all was revealed.
This coincided with the political shocks to the EU system, the
resignation of the European Commission and the stark incapacity
of the EU to determine and implement its own poliey in the Bal
kans, which further diminished the value of the euro. Our sugges
tion that the euro could prove weak and unstable was confirmed.
And this is only the beginning of the problems arising from the
structural ftaw of EMU. We would much prefer to be reporting
here that our initial sceptieism had proven unfounded. Sadly, the
warning notes sounded in the following chapters ring truer today
than ever.
Bernard H. Moss
Jonathan Michie
May 1999
IX