Year XXXII, 1990, Number 1 - Page 68


1. The problem of Economic and Monetary Union will be analysed in this report from a specific point of view: this involves, in effect, describing the ties which exist between the process which will lead to the creation of a European currency and the strengthening of common policies, and the process regarding the creation of a European Union. Thus, we will not examine in detail those technical aspects which characterize the current debate on the creation of a Central Bank, or on tax harmonization. Rather, we will restrict ourselves to highlighting those facts and problems which federalists can use to promote the development of the process intended to lead to the creation of a European Union.
We must, therefore, first go back to the adoption of the Single Act and the federalists’ evaluation of this. It is true that our judgment of the decisions taken at Luxembourg were entirely negative in nature, in that we held them to be entirely inadequate to guarantee the political and institutional minimum needed to give the Community an effective decision-making capability. At the same time, we viewed the project for the completion of the internal market, which was begun in Luxembourg on the basis of the recommendations contained in the 1985 White Paper – with the commitment to proceed towards the abolition of all barriers of a physical, technical and fiscal nature to the free circulation of goods, services and factors of production – as an effective step forwards, in that it was intended to bring to the fore certain contradictions regarding which it would have been possible at a future date to intervene in order to claim recognition of constituent powers for the European Parliament.
In fact, immediately after the defeat at Luxembourg, Spinelli re-launched the European Union project, which had a dual structure: on the one hand, the European Parliament was to claim the conferring of a constituent mandate by the states, so that the project for a European Union would not have to pass through a diplomatic conference, but could instead be directly submitted for ratification by the member states subsequently. On the other hand, it was necessary to promote a widespread mobilization of public opinion, and it is known that Spinelli considered the possibility of a referendum on the granting of a constituent mandate, which was to take place at the same time as the next European elections.
However, the main problem which we must consider is the following: is it possible to re-launch the struggle for the Union during the present phase of the European integration process? In order to answer this question we must ask ourselves if the growth of the integration process is capable of bringing into play new forces which, thanks to federalist initiative, will constitute a sufficiently vast alignment of forces capable of overcoming the resistance that will inevitably obstruct the attempt to promote such a profound institutional transformation of the Community.
From this perspective, an examination of the problems relating to the creation of an Economic and Monetary Union is of prime importance. Indeed, in addition to the continued talk regarding the mythical 1992 deadline, it is necessary to examine the real problems which today have been brought out into the open, and which are thus the forces that we can count on to re-launch politically the process leading to the creation of a European federation.
2. The project for the completion of the internal market has notably strengthened the chances of success in the creation of Monetary Union. The UEF (European Union of Federalists) has for along time taken a clear stand in this regard. Federalists have fought for the elimination of the flexible exchange rate system, which has had strongly adverse effects on the European integration process. While pointing out its limits, they have strongly supported the project for the creation of the European Monetary System, which represents both a clear step forward as compared to the preceding situation, characterized by total flexibility, and a springboard for further progress towards a Monetary Union.
And the EMS has been just that. It has made it possible to overcome the serious difficulties created by flexible exchange rates, as regards both agricultural and industrial integration. It has strengthened the momentum towards monetary stability in those countries characterized by high inflation rates, at the same time as stimulating the growth of processes of production restructuring. It has promoted the convergence of national economies, thereby favouring further progress in the process of monetary integration.
Today, an important stimulus towards monetary unification comes from the decision to move on to a complete liberalization of capital flows. It is clear that a decision of this kind, designed to promote an efficient allocation of savings on the European capital markets, presupposes stability in exchange rates. For in fact, only in this case it will be possible for savings flows to be solely determined by the differences in profitability among alternative investment projects, rather than being conditioned by the relative strengths of the various currencies, and therefore by the prospects of devaluation (or revaluation) for each investment.
The road to follow is already marked out, after the decision at the Hannover Summit to hand over the task of preparing a report on the creation of a European Central Bank and the role of the ECU to a Committee chaired by Jacques Delors; the report is to be presented on the occasion of the Madrid Summit, at the end of the six-month term of the Spanish presidency. In this area, the role of federalists, that of taking the initiative, already appears to have exhausted itself: other economic and social forces have now entered the field and are fighting for the achievement of those objectives which the UEF brought to the fore for a long time. Our task during this phase will be one of active surveillance. Clearly, the results that come out of the Madrid Summit will have to be carefully evaluated in order to determine to what extent it will be possible to take advantage of the advancements proposed in the monetary area to promote first the creation of a Monetary Union and then move towards the completion of the European Union.
3. Obviously, in the event of the complete liberalization of capital movements, monetary policy at the national level will lose its effectiveness: interest rates would be determined on the European market and a variation in these rates by an individual country, for purposes of the expansion or restriction of productive activity, will have no influence on effective demand, but only on the balance of payments. If stabilization and growth policy loses an instrument at the national level, there will then be a need for a strengthening of the powers – granted to the Community – for the management of economic policy. And this need is even more evident if we consider the limits that the completion of the internal market will also impose in the area of tax policy.
With the Single Act, the Community’s member states have, in effect, decided to promote the creation of a “space without internal frontiers, in which the free circulation of goods, persons, services and capital is assured” before 1993. However, the creation of a single market for goods necessarily presupposes that VAT and excises systems in effect at the moment be reviewed. Today, on the basis of the rules of the Treaties of Rome, the existence of tax frontiers is made necessary by the application of the principles of taxation in the country of destination: in fact, in order to avoid the appearance of distortions of a fiscal nature in the competition between goods produced in the various member states, which are characterized by different systems of indirect taxation, at the moment of export to another country within the Community, goods receive a refund at the frontiers, of those taxes paid within the country of origin, while at the moment of import they pay a compensatory duty equal to the taxes of the country of the good’s final consumption. In this way the choice of production site is not influenced by the structure of the divergent tax systems of the member countries, since there is uniform tax treatment, within each consumption market, for all goods, regardless of whether they were imported or produced domestically. At the same time, there still is a lot of room for autonomy regarding the management of tax policy, since the national authorities responsible for economic policy can fix tax rates and tax bases while bearing in mind the needs of their own countries.
The completion of the single market requires, on the other hand, the elimination of tax barriers, and the proposals put forward by the Commission, at least as far as the VAT system is concerned, call for the application of the principle of taxation in the country of origin. Export will no longer constitute a non-taxable operation, but will instead be taxed on the basis of the rates of the country in which production takes place, and goods can then freely circulate within the Community. This proposal implies as a necessary corollary the harmonization of the taxable bases as well as a certain alignment of the tax rates. If we bear in mind that, in the case of excise duties, the Commission’s proposals assume a total uniformity of rates, we may conclude that the Community is heading towards a Tax Union, and thus towards a reduction in the member states’ financial autonomy. On the basis of these observations a recent document by the Bank of Italy concludes that “the change to a taxation based on country of origin and the birth of a Tax Union are justified above all in view of a Community fiscal system that will be much more developed than the current one, and that will hand over functions which today are carried out at the state level to the supranational level, as well as a system of grants that is much more detailed than the present one. The strengthening of Community finances in a federal direction and the political and institutional developments connected with this, would constitute an important moment in the process of European integration”.
4. The stimulus towards more widespread tax harmonization is further strengthened by the process under way for the creation of a European financial area, since the liberalization of capital movements runs the risk of causing sizeable distortions in the allocation of savings in the presence of significant differences in tax structures. In fact, investment decisions are influenced by the characteristics of the tax system, as far as the location of corporations headquarters and their productive activities are concerned, as well as the use of savings by private investors. For this reason, the Commission intends to put forward precise proposals to bring both the taxable base and the corporate tax rates closer together, in addition to encouraging harmonization of taxes on capital income of the member countries.
In addition to the specific solutions being proposed, it must be pointed out here how the inner logic of the process that is to lead to the completion of the internal market manifests itself. In the years following the creation of the Common Market, the process towards trade liberalization for goods was begun and brought to a conclusion, by means of the elimination of customs duties and quotas, which weighed heavily on intra-Community trade. The monetary crisis that followed the decision to make the dollar non convertible into gold, and the economic crisis following the rise in raw material prices, in particular oil, interrupted this evolutionary process for some fifteen years. However, thanks mainly to the action undertaken by the European Parliament due to the initiative of Altiero Spinelli, which re-launched the process for the completion of a Monetary arid Economic Union and the commitment to profound institutional reforms that are necessary to deal with the democratic deficit that still characterizes the Community, the Delors Commission proposed a specific program for the completion of the internal market by 1992 and get it accepted by the governments. In effect, this involves completing the effective unification of the internal market as far as the production and exchange of goods is concerned, by eliminating those obstacles of a physical, technical and fiscal nature that still exist today and which are emblemised by the maintenance of frontiers. Above all, this involves moving the liberalization process forward as far as services and production factors are concerned.
However, this process, once under way, necessarily requires the implementation of further reform measures. Displaying an attitude that is much more realistic than in the past, the Commission has thus presented its proposals regarding tax harmonization. Shortly after, as soon as the rules for guaranteeing the liberalization of capital movements had been defined, it became obvious that it was necessary to proceed further along the road to harmonization of corporation income taxes and taxes on capital income. With equal clarity the governments were made aware of the urgent need to restart the process towards the creation of a Monetary Union, with the creation of a European Central Bank and the transformation of the ECU into a true currency. The Community has thus set out along a downward path towards Monetary and Economic Union, where each decision taken makes further steps to speed up the achievement of the final objective even more indispensable.
This represents the basis for the federalists’ evaluation of the Single Act which, on the one hand, they immediately judged unfavourably because of its failure to overcome the democratic deficit which characterizes the Community, while on the other pointing out its potential, which is tied to the decision to promote the completion of the internal market. The jump from nation states to a united Europe is possible, in fact, only during a phase in the process in which some decisive obstacles regarding the question of sovereignty – in short, money and defence – can no longer be confronted in a positive way at the national level, but instead require a European solution. At the same time, the growth of the process of economic integration links interest groups to the European level and thus favours a political initiative designed to transfer sovereignty from the states to a European Union in the process of being formed. This is the area in which federalists can become involved in order to lay the basis for their claim for the granting of a constituent power to the European Parliament, since each step forward towards the completion of the internal market and the realization of a Monetary Union increases the democratic deficit in the Community, and thus makes the foundation of an effective governing of the European economy even more urgent.
5. In a recent study carried out by request of the Commission – the Cecchini Report – the economic advantages arising from the completion of the internal market are analytically determined. We may mention the principal results brought out by this Report, in order to evaluate to what extent these would be attainable without the support of active interventions in the way of fiscal policy by the Community.
The Report estimates above all the direct costs of the formalities at the internal frontiers and the administrative costs that result from this for the public and private sectors, which are calculated to be equal to 1.8 per cent of the value of goods traded within the Community. To these costs must be added those for industry deriving from the existence of other barriers, technical ones in particular, which are at least equal to 2 per cent of the total costs of the firms. The total of these costs represents around 3.5 per cent of industrial added value.
The Report shows that the potential economies of scale for which no advantage is derived by the European industry are considerable. A unified European market would in fact be able to guarantee stronger competition among firms of an efficient size, and in this way it is estimated that around one-third of European industry could benefit from a reduction of costs which, according to the sector, could vary from 1 per cent to 7 per cent. The economies of scale thus obtained would be equal in total value to 2 per cent of European GDP.
On the whole, taking all sectors into account and all types of cost and price reductions, the Report reaches the conclusion that the total economic advantages would amount to a value of between 4.25 per cent and 6.5 per cent of GDP for the Community as a whole. At 1988 prices, and for the 12 member countries taken together, the total value would vary from 170 to 250 billion ECU.
As far as macroeconomic evaluations are concerned, the effects of the completion of the internal market have been grouped by the Report into three categories, each of which has a different impact:
a) the elimination of delays and costs linked to internal frontier formalities;
b) the opening up of public markets to competition;
c) the liberalization and integration of financial markets.
In addition, the more general effects in the area of demand are considered, which reflect changes in business strategies within the new climate of increased competition.
The global impact would become apparent above all through downward pressure on prices and costs and, with a slight delay, in a stimulus to the increase in production. By 1992, the cumulative impact would be equal to 4.5 per cent in terms of GDP, and to a reduction of 6 per cent in the level of prices. The medium term impact on employment would be positive, with the creation of 2 million jobs. The Commission has further estimated that, in the event of more active accompanying macroeconomic policies, the increase in GDP could reach 7 per cent and could be accompanied by the creation of 5 million jobs. In short, the potential economic advantages which could be obtained through the completion of the internal market are substantial. It is necessary to note, however, that, in the absence of expansionary macroeconomic policies designed to create favourable demand conditions, it is not at all certain that these potential effects will actually occur.
The proposal by Albert, that the completion of the internal market should be accompanied by a European investment plan, capable of sustaining demand, and thus reducing unemployment, appears to be more than ever of current interest. There exists in effect an “effectiveness multiplier for Community expenditure”. Compared to isolated national measures, an expansionary fiscal policy managed at the Community level produces an effect that is from two to four times greater with regard to the acceleration of the growth rate, and from one to two times lower with regard to the adverse effects on the balance of payments. It is a question, therefore, of using the lending capacity of the Community, and that of the BEI in particular, to finance additional investment projects. A three-year Community loan of around 20 billion ECUs (with an increase of around two and a halftimes the financing granted by the BEI in 1987) would thus lead to a yearly increase in the growth rate of one percentage point.
Regarding the use of these investments, we need only point out that the Round Table of industrialists presided over by the President of Volvo, Guyllenhamar, has identified a large number of investments in Europe equal to some 50 billion ECUs for a group of projects, (tunnels, transnational TGV, telecommunications, environment, transport) with a financial return in the order of 7-10 per cent. It is clear that the budgetary austerity policies undertaken in recent years by most of the Community’s countries have given rise to an important number of unsatisfied needs. The urgency for a strengthening of public intervention at the Community level must be further emphasized if one considers the other objectives which economic policy must pursue within the Community.
6. The Cecchini Report, like the current economic debate in general, tends to point out the advantages, in terms of efficiency, arising from the completion of the internal market. These evaluations are certainly important, and should not be underestimated. However, while several conservative political and economic groups, expressed in particular by the political stand on Europe adopted by the British government, emphasize the need to rely solely on market forces and to guarantee the survival of the exclusive sovereignty of the member states, federalists are fighting for a political conclusion of the process begun by the decision to promote the completion of the internal market. To federalists, in fact, this political development is indispensable not only to reduce the Community’s democratic deficit, but also – and at the same time – to permit the realization of other important economic objectives, in addition to the greater efficiency in the allocation of resources made possible by the elimination of barriers that interfere still today with the free circulation of goods, services and factors of production.
The need for an increase in the size of the Community budget to at least 2.5 per cent of GDP in order to guarantee an adequate capacity for the automatic stabilization of production levels as well as an effective support of the weak areas in the Community during the process of monetary unification, has already been clearly pointed out in the MacDougall Report, to which federalists have several times drawn the attention of political, social and cultural groups. This need must be put forth again today with force, if the completion of the internal market by 1992 is not to turn into uncontrollable deregulation, with a market dominated by the largest financial and economic groups and with complete disregard by the Community in relation to the pursuit of those values that uniquely characterize European society.
It is not necessary here to define precisely the development of those common policies already undertaken and the characteristics of the new policies to be advanced. We will limit ourselves to a brief review of the main objectives which must be pursued, parallel to the completion of the internal market, by means of a substantial increase in the size of the Community budget.
a) Firstly, it is necessary to guarantee the maximization of production and the reduction of unemployment. From this viewpoint, as we have already mentioned, the elimination of barriers of all kinds which still exist must be accompanied by the use of an active policy supporting effective demand.
b) A second objective, also called for in the Single Act, involves social cohesion, or the creation of a European social area, which presupposes the strengthening of the already-existing structural policies and the undertaking of new interventions, above all in the Community’s weakest areas.
c) The creation of a large market by itself does not guarantee a fair division of benefits on a territorial basis. In this regard as well there exists the need for greater appropriations for structural policies and for greater spending capacities at the Community level; measures are needed for the creation of adequate infrastructures, which are indispensable when reducing territorial imbalances already evident within the Community; the latter will inevitably grow worse, without the necessary corrective measures, during the process involving the completion of the internal market.
d) Furthermore, it is necessary to undertake an effective ecological restructuring of the European economy. It is true, in fact, that the problem is mainly regulatory in nature, since constraints must be imposed on the market so as to direct production and consumption in an effort to safeguard the environment and conserve its natural resources. However, there are also important problems regarding the use of financial resources, which are indispensable to make the processes of production restructuring compatible with other economic objectives (for example, social cohesion).
e) Finally, an active policy must be begun at the European level to ensure that the growth of the European economy will be compatible with the development of Third World countries. Here as well it must be pointed out that the idea of a “Marshall Plan”, designed in particular to support the countries of the Mediterranean basin and the African ones, has become part of the cultural heritage of European federalists, and has been explicitly affirmed in the “Mediterranean Manifesto” by Mario Albertini, which was recently approved in the First Conference of Federalist Forces in the Mediterranean held in Potenza on October 28-30, 1988. This theme has been taken up again in a very innovative manner with reference, among other things, to the social aspect of this phenomenon in terms of the immigration problem, in a motion presented to this Congress at the end of the work by the Commission on the Rights of Citizens set up under the UEF Federal Committee.
From this very brief examination it is nevertheless clear that the Community needs a larger budget in order to guarantee the fulfilment of these objectives which should coincide with the completion of the internal market. However, this increase in the budget’s size and the strengthening of common policies will necessarily tend to worsen the Community’s democratic deficit, in an untenable way, and will thus represent a further stimulus for the federalists’ claim that it is necessary to move on to the creation of a democratic power to govern the European economy.
7. If the Community progresses towards an Economic and Monetary Union, it will become increasingly important to undertake, as the Werner Report has already pointed out, effective co-ordination of the member states’ budget policies, in particular as regard the determination of the deficit and the means of financing it.
In this regard, there are several models which can be adopted. In the majority of existing federations the member states retain the power to decide their own debt levels, and total amount of expenditure and tax intake. Hence, as they no longer have the monetary instrument at their disposal, the member states reserve for themselves the right to obtain the loans necessary to achieve a balanced budget from the market. The only exception to this is the Australian Loan Council, since in that country the federal authorities play a pre-eminent role in deciding on how much credit each member state can have, with the Loan Council acting as a body which negotiates loans on behalf of the states.
Clearly, what we have here are two polar-opposite models: in fact, in the first case the power to control a fundamental variable of economic policy by the central government appears to be excessively weak; in the second case, on the other hand, the degree of centralization is at a maximum, since the member states have lost their autonomy in determining their overall expenditure and tax intake levels, even if they presumably take advantage of a lower cost of indebtedness thanks to the centralized management of loans carried out by the federal body.
Another possibility would be to make it obligatory for member states to eliminate the “structural” deficit by means of constitutionally-based rules or to keep the budget balanced on a cyclical basis. More generally, however, if the wish is to correctly define the problem regarding the balancing of the member states’ finances on the basis of the principles which characterize a federal state structure, then it does not seem desirable to allow the market, in the last instance, to decide on the debt levels permitted to the various levels of government. Rather, a solution which grants the Community the power to decide the overall debt levels for all public administrations in order to serve the equilibrium and growth needs of the entire European economy, appears more in order. In this instance the member states would be faced with exogenously-determined maximum debt levels, and on this basis they would have to establish the amount of tax revenue and expenditure. The determination of the total level of indebtedness will naturally have to take into account the need for an (anti-cyclical) economic policy management, while the distribution of credit among the various countries will also have to be carried out with regard to the objective of reducing those regional disequilibria of a structural nature, as well as that of a stronger social cohesion within the Community.
Once again giving the Community such delicate tasks to undertake, together with the parallel reduction of national sovereignty in fiscal matters, is only conceivable if at the same time there is a strengthening of the European Parliament’s powers and its capacity to control European government. If the reverse should hold true, not only will the structure of the decision-making process be unacceptably in contrast with fundamental democratic principles, but it will also certainly be paralysed by the resistance of the member states, who, in the present situation in the Community, can even make use of the right of veto.
8. In view of a gradual creation of an Economic and Monetary Union we can define a policy aimed at balancing public finances in those European countries with serious budget deficit problems, so as to guarantee at the same time the strengthening, and not the dismantlement, of the welfare state. The reference point for confronting this problem is clearly the theory of fiscal federalism. And the analysis of the problem must begin with the fact that during the next few years public demand will, in any event, play a decisive role in stimulating a new growth cycle in productive activity and the beginning of a process of ecological re-structuring in the economy.
Within the framework of the Keynesian system the state’s primary task is to intervene to guarantee full employment, either by creating new demand directly through public expenditure in order to make up for insufficient private demand, or, by making effective a potential demand for goods and services which does not take place in the market due to the unavailability of income. In this case the state, to stimulate demand, transfers income to the poorest classes or reduces taxes on private income. In this way, by taking advantage of the available potential demand, the economy was ensured a full growth cycle, especially after the Second World War.
Today, at least in European countries, the fundamental needs of the population are to a large extent satisfied, and thus the potential demand that can be made effective involves goods with a high elasticity and whose production is mainly controlled by the public sector. At the same time, an ecological restructuring of production and consumption inevitably assumes substantial public intervention. In short, in this area of public spending an expansion, not a reduction, is foreseen.
On the other hand, despite the present tendencies favourable to a drastic reduction in public intervention in the economy, it is not reasonable to maintain that the advances which the welfare state has been able to assure to European citizens in the presence of much lower income levels, and which have brought Europe to the forefront as compared to the United States and Japan, should now be done away with in the presence of a much higher absolute level of wealth.
The fact is that the true problem on today’s agenda is not that of reducing welfare expenditure, but of making it more efficient. In this perspective, it is necessary to point out a weakness in traditional thinking, which tends to identify public intervention with the direct production of public goods by the state. In reality, if the idea is to combine efficiency with equity, and therefore to move towards the solution of the crisis in public finance without sacrificing the social achievements of the past, we must hand over a greater governing responsibility for social spending to those groups directly concerned.
In short, the lower-level government bodies (and thus not only the member states, but the regions, provinces and municipalities as well) must provide for social services which concern their own populations, either directly or through agreements with private producers in cases where these are technically and economically more efficient, while making them responsible for the financing of these services. The necessary precondition for this is, obviously, that the central level of government – that is, the European level – must guarantee that all the Community’s territories start out on an equal footing, by means of a suitable policy designed to create an equal distribution of resources on a territorial basis.
By decentralizing the financing responsibilities for public expenditure, social control over this expenditure will increase, thereby avoiding the degradation and corruption which statalism carries in its wake, and there will be a guarantee that social expenditure will grow to the extent that the citizens involved will be willing to hand over at the same time the availability of private goods. This willingness will be shown evidently by the agreement to an increase in taxation levels.
These considerations should serve to clear the ground of a deceptive criticism against the creation of an Economic and Monetary Union, which is based on the statement that the construction of such a Union appears destined to bring an increase in the degree of centralization in its wake. This view is used as a means of opposing those developments that have arisen out of the decision to move on to the completion of the internal market by 1992. On the contrary, the realization of an effective unity in the economic and monetary fields, and the granting of effective governing powers over the European economy to the Commission, democratically controlled by the European Parliament, both constitute an indispensable premise for the achievement of the maximum degree of decentralization on the basis of the principles of fiscal federalism, without going against the pursuit of the objectives of equity which represent an inalienable heritage of European civilization.
9. In conclusion, we have seen that the completion of the internal market by 1992 has brought forth the problem of the construction of a Monetary Union and a Tax Union, as well as that of the strengthening of budget policies at the European level. As far as the problems of the Central Bank and the transformation of the ECU into a true European currency are concerned, the process is already underway, and the responsibility for initiatives in this regard falls no longer to federalists, and thus to the UEF; rather, an equally important task, though with a different significance, has become part of their duties: that of active vigilance, so as to make sure that those obstacles which will inevitably be created by more conservative groups, do not prevent this process from succeeding.
It is rather in the area of the Economic Union that federalists today must take on initiatives, by promoting a debate within the UEF on those issues that have been briefly discussed here, attempting to establish a common position and, as a result, having close contacts with other groups – political, social and cultural. These efforts are closely connected with a UEF policy that seeks to re-launch the constitutional initiative in order to attain the foundation of the European Union. Without progress in the political area, it is not, in fact, realistically imaginable that the completion of the internal market will occur by 1992.
The main target for the UEF in this area is undoubtedly the European Parliament, which must once again be made aware of the problems analysed in the MacDougall and Albert - Ball Reports, those concerning the construction of a Tax Union, and the development of an Economic Union based on the principles of fiscal federalism. However, the UEF must also turn to other economic, social and cultural forces, offering them the solutions worked out by federalists to deal with the problems which will inevitably come up regarding the 1992 deadline. In this way the alignment of forces that the UEF can mobilize in the struggle for the construction of a democratic power at the European level will be widened. This, in fact, represents the decisive objective on which the completion of the internal market and the creation of an Economic and Monetary Union depend. Also in this regard, it will be indispensable for the Congress to express itself in precise terms regarding the re-launching of the federalist initiative, in view of the construction of a European Union, and on the conditions which are necessary to carry out for this goal.
Alberto Majocchi

* Report presented to the II Commission at the XIV Congress of the European Union of Federalists (U.E.F.), held in Brussels, April 7-9, 1989.



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