European Monetary Unification for Balanced Growth: a New Approach

Abstract

In this essay I surmise that, sustained and regionally balanced growth being ultimately the main economic goal of integration, progress towards economic and monetary union in Europe ought to be enhanced by defining a number of large economic regions and regrouping them on the basis of their ability to realise their full growth potential. Although each group might include whole member countries, the border between the two would cut across national frontiers. Instead of having one general economic policy for the whole Community, with piecemeal measures for the weaker regions tacked on, twin ‘regional’ policies should be defined and pursued at all times for the high-activity and the low-activity grouping respectively. Policies for the former would continue to be implemented, in much the same way as up to now, mainly by national institutions. For the latter group, instead, existing machinery would be reinforced by setting up an ad hoc body: the Multi-role European Bank. As implied by the name, the M.E.B. would be empowered to carry out a very wide variety of operations; it would be endowed with resources on a scale adequate to play a major role in raising the rates of growth in the laggard regions.