One Market, One Money?

Abstract

The Single European Act (SEA) of 1986 which created the 1992 single market plan included economic and monetary union as a formal objective and imposed on the members an obligation to work towards a convergence of domestic policies in order to achieve it. The Treaty, however, required any future institutional changes in respect of monetary policy to be done by amendment to the Treaty, a process which required unanimity. Those who opposed or who were doubtful about a future common monetary policy thought that this procedure would satisfactorily delay any change. They were disappointed and what followed is an object lesson for those who fail to take account of the steamroller like capability of the Commission and European Union to grind onwards to a conclusion. M. Delors and the Community central bankers met in committee and produced in April 1989 what came to be called ‘the Delors Committee Report’. This was to lead to a powerful surge towards fuller economic and monetary union and to a new treaty. An incidental effect of the surge was to carry away Mrs Thatcher from the office of Prime Minister in November 1990 as her opposition to monetary union caused her to adopt an embarrassingly strident tone which was out of tune with important elements in her party and cabinet.