OP:7. Agenda for Stage Two: Preparing the Monetary Platform
Author(s): Tommaso Padoa-Schioppa and Fabrizio Saccomanni
Publication Date: December 1991

Abstract: These pages are being written on November 1991 on the eve of the European Council's meeting in Maastricht at which a constitution for monetary union is expected to be approved in the form of an amendment to the Treaty of Rome; this will subsequently be submitted for ratification to each of the signatory nations' parliaments. As this deadline approaches, a number of aspects of the new Treaty will await definition. Some, not unimportant, are of a legal and institutional nature and do not concern us here. Our attention focuses rather on the functional and operational issues that will have to be tackled in order to prepare the final stage of union. we are thus taking a 'post-Treaty' view, even though the nature of the solutions the Treaty supplies to those outstanding legal and institutional aspects of transition will either facilitate or handicap the resolution of the functional and operational problems under discussion.

The building of Europe does not consist only of actions; it is also an intellectual exercise. It is not just a question of applying an existing model of political, economic or monetary order. For economists , the creation first of the single market and then of economic and monetary union (EMU) implies a rethinking of the very foundations of economic management, the relations between the market economy and market institutions, the allocation to different levels of government of responsibility for economic policy, the aims and distribution of central bank functions. The present paper is intended as a contribution to this intellectual process.

Implementation of the Treaty involves the creation of a European Central Bank, just as implementation of the Treaty of Rome and of the Single European Act subtends the creation of a single European market. The treaty will embody a concept of a central bank; but the task of defining the functions and instruments of the European Central Bank will not end there. During the implementation phase the elaboration and discussion of ideas will continue, within the confines agreed in the texts, and will reach a much deeper level of analysis than is possible in a constitutional document. Our starting-point must therefore be a detailed conceptual view of the functions and instruments of the central bank.

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