Year XXXV, 1993, Number 2 - Page 119
THE CRISIS IN THE EMS*
With the decision of the Community’s finance ministers to widen fluctuation bands to 15 percent either side of central parities, the EMS has been reduced to pure and simple European camouflage for national policies. These fluctuation bands have in effect removed the features which gave the EMS its distinctive character as a system of fixed exchange rates, compared to the Bretton Woods agreements. The main advantages of the EMS were that it made devaluation decisions collective (and no longer unilateral); that through the ECU it mobilised private interests; and that it made public and sensational the unilateral breaking of the common rules by any individual state.
It is thanks to these features that the EMS had practically become the basis for the new attempt to abolish national currencies and create a European currency; Europe would undoubtedly have achieved this, had the arrival of recession been delayed by a few years. It therefore needs to be recognised that the emptying of the EMS’s potential means that there no longer exists a strategic plan for the continuation of European unification and for the creation of a real and effective political union. If the governments and political forces in general do not admit their mistake, Europe, as a consequence of the enlargement of the Community, will set off towards the creation of a vast free-trade area which, without any political power underscoring it, will clearly not last long.
The arguments which have been used against the EMS as a fixed-rate currency system, especially as regards unemployment and growth, are false since, even granted (although we do not accept this to be the case) that the EMS was not a good mechanism for provisionally regulating currencies, it remains true that, by abolishing it, this control is entrusted to international speculation, which is increasing enormously. This observation is sufficient to establish that by de-stabilising the EMS (and hence, in turn, the greater part of the Maastricht Treaty) the governments were not motivated by the problem of unemployment, but rather by pure and simple electoral considerations. In reality, in the Community’s Council of Finance Ministers the choice was not between a national policy and a European policy, or between a reactionary policy and a progressive one, but between two different national policies: one with a beneficial European effect, the other with a damaging one. Moreover, it is conceivable that there no longer exist any good national policies that at the same time are not good European and world policies.
The time has come to state clearly that the European currency can be established immediately. There already exists: a) the European Parliament elected by the citizens; b) a form of government, the Commission, which would already be able to effect real policies were it not impeded by the Council of Ministers which, contrary to all democratic principles, assumes control of both legislative and executive power; c) an economy whose integration is already well-advanced, to the extent that it renders the national instruments of economic governance practically useless. Hence it is sufficient to take the European vote seriously and re-establish the principle according to which the choice of the government falls to the citizens, in order to assert that it is entirely possible, right now, to establish a European economic policy, and in particular, to create a European currency forthwith if, at the same time, a European plan for unemployment, economic growth and all other related factors (not solely economic), is adopted. The problem, then, should be tackled in this fashion: there can be no European policies without dealing with the currency issue; the currency can not be created without dealing seriously with the problems of unemployment and economic growth.
Italy has a particular responsibility as regards these issues, even if it is no more the same Italy of De Gasperi and Spinelli. Italy, thus placing herself on the same level as the United Kingdom, opened the crisis in the EMS by violating the substance of the Community treaty in the sly hope of being able to base its fortunes on what is in reality an extremely fragile basis – competitive devaluation. Such a policy can encourage growth, but only that of nationalism, and certainly not that of the economy in an increasingly united world.
Italy is, rightly, trying to resolve its crisis by adopting more democratic and effective decision-making mechanisms as regards the representativeness and form of her government. However, such reform will make no sense if Europe falls apart in the meantime.
The European Federalist Movement has for a while now been pointing out that Italy is evolving increasingly towards a pre-fascist power situation. This depends, ultimately, on the corruption caused by the fact that the political struggle and the actual life of the parties come to a halt at the national borders, while the number of problems which can only be solved on a European or world level is continuously growing. Hence Italy’s introduction of a new decision-making system which is more democratic and effective, is a positive step. But it should never be forgotten that this holds true on one condition: that at the same time a satisfactory decision-making system is also created at the European level. Otherwise there will be good government where there are no large problems to face, and no government where such problems exist.
Due to the governments, which, having worked for years to plan the gradual creation of a European currency, have halted the process when faced with the first real difficulty, the battle for Europe has become more difficult. But this simply means that we need to commit ourselves further, since without European unity there is no salvation. In this light, the European Federalist Movement will commit itself all the more, and confirms herewith that it will do what is possible to persuade all citizens, also in the context of the 1994 elections, that we are facing a choice between giving in to international speculation and to American great power policy, and European redemption.
*Declaration by the President of the MovimentoFederalista Europeo, Mario Albertini, issued on August 2, 1993.