Political reactions in the Member States of the European Communities 1
The Werner Report was officially submitted to the Council and the Commission of the EC on 15 October 1970 before being published on 16 October 1970. Political reactions soon started to come in from the Member States, spearheaded by the media. 2 Over and above the objective information they gave, they reported on the attitudes their respective countries had taken towards the establishment of economic and monetary union by stages, before even their governments had had a chance to state their positions officially. The only ones to react on the actual day the report was published were the Dutch Finance Minister, Johannes Witteveen, and the Vice-President of the Commission, Raymond Barre. 3
On 20 October 1970, the Federal Minister for Economic Affairs, Karl Schiller, gave a press conference to explain the content of the plan by stages. His comments were positive: he pointed out that the Werner Report had struck a compromise between the countries which wanted to achieve economic and monetary union by giving priority to monetary issues and those, such as Germany, which put the coordination of economic policies within the Community forward as the starting principle, in other words as a prior condition. In fact it was the principle of striking a balance between these two trends that the Werner Committee opted for, as well as deciding that the coordination and convergence of the Six’s economic policies and monetary policies needed to proceed in parallel. 4 In the political negotiations on the plan by stages, the government in Bonn had therefore managed to preserve the basic principles of its economic policy, enunciated in the Schiller Plan put forward at the start of the year. 5 The German minister concluded by saying that he hoped to see the report approved as it stood by the end of the year 1970. At a domestic level, Schiller had already done what needed to be done. On 4 October, before the plan by stages had been officially sent to the governments of the Member States, the minister sent an official communication to the Federal Chancellor pointing out that ‘the Federal Cabinet will be receiving the Werner Report shortly […] and will be asked to approve it […] It is important that approval should be given while Germany still holds the Presidency [of the EEC Council of Ministers], so that stage one [of the plan], which is to last three years, can start on 1 January 1970.’ 6 Schiller was careful to stress the contribution made by the German representative to the committee of experts. This was Johann Baptist Schöllhorn, who had ‘driven the proceedings forward by his own proposals and helped to secure the requisite compromise […] for which, in the interests of European policy, we went to the acceptable limit from the economic point of view and in terms of political stability.’ 7
The Bundesbank was basically in favour of the plan for economic and monetary union put forward in the Werner Report, which it considered to be serious and well-balanced, though possibly on condition that its mechanisms and modus operandi were later adapted to confirm more closely to its ideas. 8 The proposals in Germany’s official statement of position 9 included one drawing its fundamental inspiration from the statutes of the Bundesbank, advocating an autonomous central bank as a model for the future European central bank. At the meeting of Finance Ministers held on 29 May 1970 in Venice and during the debates on the interim report, 10 Karl Schiller emphasised the fundamental political importance of an economic and monetary union. He stressed that more thought needed to be put into the question of the transfer of powers to the Community bodies and on institutional issues. He spoke, firstly, of ‘a body given responsibility for short-term economic policy and [secondly] of a body with responsibility for drafting decisions in the monetary field centrally. This body should be federal in character and enjoy a wide measure of independence from the political authorities.’ 11 Furthermore, strengthening economic cooperation 12 and stepping up collaboration between the governors of the central banks and the Council were among the priorities the Schiller Plan set for stage one of economic and monetary union. Once the Werner Report had been published, the Bundesbank constantly put that requirement to the forefront, reiterating that responsibility for future monetary policy must basically lie with Europe’s central bankers as a collegiate body, ‘independently of the Council, though with due regard for the guidelines drawn up by the Council with respect to economic policy’. 13 Another condition to which the German central bank was extremely attached was that of a ‘genuine harmonisation of the Member States’ economic and financial policies as a precondition for a reduction in exchange rate fluctuations between European currencies’. 14
Chancellor Brandt took the same positive view of the Werner Report. He mentioned it openly to the Foreign Minister of Belgium, Pierre Harmel, on 14 October when the minister was on an official visit to Bonn. 15 He felt that practical measures to set economic and monetary union in motion should be adopted as soon as possible. Harmel told him that his understanding was that ‘France will side [with those who approve the Werner Report]. Italy will not raise any difficulties. The Netherlands can be expected to have some reservations, but those will disappear if the Federal German Government approves the report’. 16 In a letter to Schiller at the end of October 1970, Chancellor Brandt emphasised the importance of the plan by stages to European integration and noted that its final adoption by the Council of Ministers, if possible before the end of the year, ‘will very probably be the most important decision since the signing of the Rome Treaties’. 17 In a statement on the foreign policy of the Federal Republic which he made to the Bundestag, Willy Brandt described the Werner Report as the ‘new Magna Carta of the European Community’. 18
It is worth noting that the Chancellor and the Federal Minister for Economic Affairs did not always see eye to eye and there were sometimes disagreements over economic and monetary union. Chancellor Brandt advocated intra-European monetary cooperation, while his minister was in favour of joint consultation on the external aspects of the Member States’ monetary policies. The consequence was that the German Government was against any initiative which favoured one position to the expense of the other. 19
At the end of October 1970, when the Commission submitted its own proposals for an economic and monetary union by stages, 20 the German Government severely criticised the reductive interpretation it placed on the Werner Report. 21 Bonn felt that the Commission seemed to want to favour monetary cooperation aspects at the expense of economic harmonisation right from the first stage, and, as regards powers, that it seemed to be attacking the independence of the national central banks. 22 The conclusion it drew was categorical: ‘The Commission’s proposals for the establishment of an economic and monetary union by stages are too limited and do not go far enough.’ 23
Appearing before the European Parliament at a plenary sitting held to debate the Werner Report, Karl Schiller spoke as the President-in-Office of the Council of Ministers of the EEC. In his speech, he summarised the essence of the plan by stages as proposed by the Werner Committee 24 and, at the same time, set out the main points of the official German position. 25 ‘[…] In keeping with the principle of parallel progress to which the Werner Report attaches paramount importance […] it is essential, not to say unavoidable, that the requisite steps be taken to bring about a convergence between the various economic policies and gradually fuse the monetary policies together. […] Targets to be achieved and actions to be taken in the economic policy field must be set, alongside the measures designed to bring about the convergence of monetary policies. We must give up the present system. We have a common market and a customs union but, as we all know, we are still living in a system in which separate national policies govern the economy, finance and the short-term economic situation, a system which is bound to give rise to never-ending imbalances. […] An abstract European monetary mechanism would quickly fall apart in the event of an imbalance unless it went hand in hand with a convergence or a parallel harmonisation of economic policies. […] The proposals put forward in the Werner Committee do not constitute a plan consisting of a set number of stages. All that is provided for is stage one and the final stage. As I see it, stage one will, according to the Werner Report, be a convergence and confirmation stage, because national policies need to start being harmonised from the outset. […] Stage two, and I would even say the intermediate stages, will, to judge from everything that can be deduced from the report, comprise the transformation stages, i.e. the gradual ceding of national powers to the Community bodies. As for the final stage, which in Paris once we designated by the expression the “Paradise of Europe”, it will put the seal on the full transfer of national powers over economic and financial policy to the Community. The seal will be set on the transfer of powers in the monetary field to a European system of central banks by the creation of a single European currency whose symbolic value cannot be overstated. […] We cannot achieve this progress unless we first drop the idea of setting up any automatic procedure [and] unless we also introduce political breathing spaces, in other words unless the transition from one stage to another goes hand in hand with a consideration of the political issues. […] Secondly, we will only get through this succession of stages up to the final stage if we take account, simultaneously and, as far as possible, head-on, of all economic, political and social points of view — if, in other words, when moving on from one stage to the next, we give all the attention due to the interdependence between all the economic and political factors in play. There is a third precondition: monetary union, which is our ultimate goal, must itself be part of a world monetary system which is itself evolving […], reforming […]. Our monetary union should be grounded in two principles, stability within itself and flexibility towards the outside world.’ 26 Germany subscribed to the recommendations in the Werner Report regarding the involvement of parliamentary representation. Schiller thereby stressed that Europe should not be governed solely by technocrats but that it was also built on parliamentary foundations, and, as the Werner Report clearly stated, there seemed to be no way of establishing economic and monetary union without genuine parliamentary control.
Discussions on the Werner Report in France took a different turn. 27 The French authorities saw economic and monetary union as a question of high politics: therefore, any development in a supranational direction was to be suppressed in favour of an intergovernmental structure. While the Werner Report was being written, President Pompidou described how he saw political cooperation in Europe 28 when he stressed ‘[that] it can only be a matter of building [Europe] out of what is already there, a confederation of states determined to harmonise their policies and integrate their economies, and if we see it that way, we realise that the quarrel over supranationality is a false quarrel. If some day a European confederation does come into being, there will of course have to be a government whose decisions are binding on all the countries which belong to it. The problem is what this government is made from, and by what method and in what form we bring it about. […] But the government of Europe can only emerge from a coming-together of the national governments, working together to take decisions that are valid for all.’ 29
The Werner Report sharply divided political circles in France. 30 In government, the fiercest opponent was the Minister for National Defence, Michel Debré, 31 who regarded the document as ‘too supranational’. 32 His opinion was widely shared by the Gaullist ministers. In contrast, the Minister for Finance, Valéry Giscard d’Estaing, who was responsible for presenting the case in Cabinet, welcomed the Werner Report. He turned for support to the centrist ministers Jacques Duhamel 33 and René Pleven 34 as a means of getting the Cabinet to approve the plan by stages. This division of opinion prompted Giscard d’Estaing to proceed with caution. He suggested that the government start by giving the green light to stage one of the Werner Report and make the ensuing stages subject to later approval. 35 The government, including Giscard d’Estaing, thought that close coordination of short-term economic policy and growth prior to monetary integration was not welcome; the many imponderables and unknowns which such a process would inject into the economic development of the Member States would mean that France would have ‘its hands tied’ in the years to come. There was unanimous support in Cabinet, on the other hand, for a rapid transition to a monetary union, which was seen as a way of preventing, and safeguarding against, a crisis involving the franc. The Quai d’Orsay felt that the Werner Plan needed to be taken further, given the prospect of an enlargement of the European Communities 36 This would provide an opportunity to take greater account of ‘the weaknesses which the pound sterling could cause to the foundations’ of a monetary union.
On 18 November 1970, a select Cabinet meeting convened to discuss European affairs 37 was in fact devoted to the plan by stages. By way of introduction, Giscard d’Estaing reviewed the work of the Werner Committee and then presented the Commission’s proposal for its implementation. President Pompidou and most members of the French Government were opposed, in particular, to the idea of transferring monetary powers to Community institutions, as the Werner Plan proposed should be done in stage two of the building of the economic and monetary union. ‘There are some unbelievable turns of phrase in the Werner Report, it’s as if a red rag had been waved in front of us to see if we were calves or bulls.’ 38 At the same Cabinet meeting, the President expressed the idea of making headway by conceding ‘let us nevertheless accept this vocabulary, which is part of Europe’s hopes’. 39 One of the expressions which President Pompidou found particularly irritating was ‘European monetary hub’, which in his view had no legitimacy. ‘Europe is an economic, financial, political problem, but it is not just a monetary problem, far from it. As we long as we have not found a solution to the problem of subordination to the dollar, which is a political problem, let there be no talk of a European hub. We will only be able to talk of a European hub on the day European countries can ask the United States to take their dollars back and send them gold.’ 40
Opposition from France without a counter-proposal would be likely to isolate it and reduce its influence in the discussion. Giscard d’Estaing therefore recommended giving backing to a form of enhanced monetary cooperation between the Member States’ central banks which would reduce the scope of the transfers of sovereignty. As for future developments on the economic and financial integration front, France refused to accept any inordinate constraints being placed on its economic and financial policy and consequently wished to make as few commitments as possible. That is what Pierre Werner also picked up in his memoirs, recalling that ‘[…] President Pompidou, after reading a few forceful extracts from the report, became angry and demanded explanations from the French members of the group. 41 The prevailing opinion in ruling circles in France was best described in a remark by Maurice Schumann in the monthly review Vision: ‘We must not jeopardise the economic and monetary union of the Six by rushing into an institutional hotchpotch’. 42 What makes this disavowal of the Werner Report all the more surprising is that it had been drawn up with the full involvement of the French representatives and the intermediate report had been agreed to by the ministers concerned, including the French minister. 43 Note that the Werner Group was composed of the leaders of the various specialised committees of the Commission, who also held high national office. They included two Frenchmen: 44 Bernard Clappier, Chairman of the Monetary Committee (and also Vice-Governor of the Banque de France), and his alternate, Jean-Michel Bloch-Lainé. The members of the ad hoc committee were supposed to exercise their role on the committee in an individual capacity and in full independence, but their reactions increasingly reflected the positions of their governments, with which they were in regular contact. 45 An exploration of the German Federal Archives reveals the frequent communication (analyses, detailed explanations, comments on positions adopted, etc., as well as requests for instructions) that the German experts (particularly Hans Tietmeyer, deputy to the Chairman of the Medium-Term Economic Policy Committee, Johann Baptist Schöllhorn) sent through diplomatic channels to the Federal Ministry of the Economy, as well as to the Foreign Ministry and the Bundesbank. They were not alone; for example, ‘it so happened that Mr Clappier had the courtesy of keeping [the French Government] informed of what was going on, but of course it had no powers in this area’. 46 But Clappier, who was known for his European convictions, ‘was able to calm the distrust and irritation that France, by its position and what it wants, often arouses; and he was able to do so without ever making any considerable concessions. One of the main difficulties of his role was being the committee member who insisted the most […] on progress being made on monetary aspects, an area in which any headway naturally touches on the most sensitive aspects of national sovereignty. Mr Clappier was strictly bound not to accept any institutional developments in this area.’ 47
In the National Assembly during the debate on 21 October, ‘the nucleus of the Gaullist group became very active’. 48 By means of various interventions, it called on the French Government not just to explain its position on the Werner Report but also to take ‘the right decision’ for the country and take responsibility for it vis-à-vis the other European partners. ‘Does the government intend to give consideration to the Werner programme, which proposes progressively abandoning national sovereignty to a Community authority that resembles a federal super-government? […] If not, […] does it intend to tell our Common Market partners that it finds this programme unacceptable?’ 49
Two weeks later, at Oral Questions on 5 November 1970, attended by the Foreign Minister, Maurice Schumann, the plan by stages once again sparked off lively debate. 50 Some members explicitly stated their disagreement with the boldness displayed in the Werner Report and pointed to the more realistic approach adopted by the Commission in its own proposals. ‘The Werner Report, which is an experts’ report, seems to have approached the issues from the wrong end and to want to start building from the roof downwards, whereas we want […] to start with the foundations, and even there move forward step by step in the direction set by the Hague communiqué, in other words towards the establishment of economic and monetary union by stages. We are not against setting it up, but we do ask people to abide by the stages and not embark once again, in a different field, on the mistakes made in 1961 and 1962 in the field of political union, because asking for too much at a preliminary stage could well mean getting nothing. […] The wisdom the European Commission has shown in the face of a somewhat theoretical report from what were after all called wise men does tend to reassure us. […] We are not saying that we may not have to bring our economies closer and closer together […] or establish fixed exchange rates between [our] currencies, but there too, as with other areas, we think it is first and foremost up to the governments to act.’ 51 Others spoke out strongly against the supranational elements in the Werner Report, and particularly against France’s agreeing to them. 52 This was the point made at the time by Roland Leroy, a member speaking on behalf of the PCF (French Communist Party) group, who stressed that ‘it [the government] must explain its position. […] It must do it because the meeting of ministers from the smaller Europe to discuss this point is scheduled for 23 and 24 November. […] Is that the decisive step taken in 1970? It will be a decisive step, certainly, but a step towards the loss of all national independence.’ 53
There were also positive responses to the Werner Report from the House, both as regards making each stage of monetary integration dependent on a political decision and because of the prospects it opened up for giving Europe its own monetary individuality as against the dollar zone. ‘On the economic level, the enhancing of monetary solidarity […] is a move which may turn out to be an effective one on the road to a united Europe. We do, in fact, know that however technical they may be, monetary measures between partners in Europe cannot remain purely neutral. On the contrary, their repercussions can only have major political implications, of which I will point out two aspects. Firstly, as currency is a sovereign prerogative, monetary union will obviously cause states to work together on problems which until now have now been dealt with at a strictly individual level, with the drawbacks and hazards that that attitude has entailed. The experts have taken the point well and propose that at each stage there should be a clear statement of political will before moving on to the next stage. […] Also, creating a new monetary hub calls the present international monetary system into question.’ 54
France’s objections and the reservations put forward by Germany 55 prevented any agreement being reached at the meetings of the Council of Ministers of the European Communities on 23 November and 14 December 1970 on the launching of the first stage of economic and monetary union on 1 January 1971. To break the deadlock, Pierre Werner, in his capacity as Prime Minister of Luxembourg, but writing as the chairman of the ad hoc committee, wrote to the five heads of government 56 on 29 December 1970 to state his concern regarding the launching of economic and monetary union and express his confidence that a rapid and unanimously acceptable solution could be found. 57 The German Chancellor Willy Brandt wrote back on 1 February 1971, 58 focusing on the prospects for the plan by stages following the French–German summit held at the end of January 1971. Describing the Werner Report as a ‘fundamental strategy document’, Chancellor Brandt reaffirmed the shared political determination of the Germans and the French to make progress on the matter, and reviewed the questions on which the two partners held diverging views, notably the ‘escape clause’, 59 and their inability to hammer out a common position. He expressed his confidence, however, that the discussions would eventually bear fruit.
The 15th French–German summit held in Paris on 25 and 26 January 1971 gave a prominent place to the thorny European questions on the agenda (including the construction of Western Europe, relations with the Eastern bloc countries — the USSR and Poland — and the East German question). Discussions would also focus on economic and monetary union. 60 Pierre Werner was informed straight away, by diplomatic cable, 61 of the tenor of the talks and the conclusions reached. It emerged that Germany shared the wish of France to see economic and monetary union set up relatively quickly. To do this, a suitable instrument needed to be created rapidly and the Council would have to take a decision on this matter, ‘with or without amendments to the treaties’. The two governments agreed on the principle of parallel progress in developing economic union on the one hand and monetary union on the other. Yet this agreement disguised marked differences of opinion. While France was in favour of establishing economic and monetary union by the end of the 1970s, it refused to accept that aim as a legal obligation. Nor did Paris propose to set the duration of stage one in stone, despite the agreement on what it should involve, or consent to the setting up of a system of central banks with its own responsibility. France, in fact, called for the inclusion of an ‘escape clause’ 62 for the duration of stage one. Germany was not opposed to this in principle, but it considered that such a provision, known as a ‘safeguard clause’, 63 was a matter for stage two. Diplomatic sources stressed that ‘the only motivation for the German stance towards the Werner Plan is its concern to safeguard the stability of the German economy and currency’. 64
In a side-meeting during the summit, a German delegation 65 met the Vice-President of the Commission, Raymond Barre (accompanied by Director-General Ugo Mosca, former Secretary of the Werner Committee). The agenda for discussions included three questions linked to the plan by stages which were still open and on which the negative reactions from France had centred. 66 These were the definition of the final stage, the measures to be carried out in stage one and rules for the transition from one stage to another. As regards the final stage, Raymond Barre thought that agreement would have to be reached on its principles, ‘which must be formulated flexibly and cautiously’, while at the same time refraining from attaching any constraints to them. The Commission would give thought to the drafting of satisfactory ‘compromise wordings’ on the subject of parliamentary control, the subsequent development of the institutions, the powers of the Community and the setting up of a system of central banks. The hardest task was proving to be that of laying down rules for the transition from stage one to stage two in the treaty framework, having regard to the need already referred to in the Werner Plan to carry out a revision of the treaties for the transition to stage two and then stage three. 67 During stage one there were plans for certain monetary measures which would obviously not lead immediately to monetary union but would be such as to pave the way for future progress, by, among other things, preparing public opinion for the coming changes. Schiller, the German Minister, was particularly concerned at the fact that in the absence of a consensus as to the measures to be adopted in stage two, ‘stage one will go on forever’. 68 He emphasised that if France could not be forced to move forward by the currently available legal means, then the Council would have to impose on it the political duty of continuing along the path of economic and monetary union after stage one. Vice-President Barre shared this feeling: failing a consensus, any progress towards economic and monetary union would be impossible.
At the end of the summit, France agreed to allow certain powers to be transferred to the Community in the final stage. However, it rejected any idea of making structural adjustments to the decision-making process 69 which was so dear to the Germans and the Dutch, 70 as well any amendments to the Treaty of Rome and any encroachment on the predominant role of the Council of Ministers or the unanimity rule (in votes on important matters). The principle of parallel development 71 underlying the Werner Report was substantially altered. Under German pressure, the French agreed to a future autonomous system of European central banks but remained hostile to a decision-making centre for economic policy in the final stage of economic and monetary union. 72 Extending the Community method was, therefore, rejected in the field of economic union and it was up to the governments of the Member States to harmonise their economic policies through joint consultations. The Germans, in return, agreed to action being taken in stage one to reduce the margins for exchange rate fluctuation, set up a monetary support mechanism and create a European monetary cooperation fund. They also got their way on a principle defended in the Schiller Plan: the transition from stage one to stage two would not be automatic. 73 The two partners agreed that if they did not manage to secure an agreement on the final stage, on its economic and institutional implications, the measures recommended for stage one, in particular the reduction in the margins for fluctuation, would be dropped.74
In his memoirs, Pierre Werner recalled that ‘President Pompidou and Chancellor Brandt reached agreement there on the method for establishing economic and monetary union. […] The price of this new understanding was a safeguard clause proposed by the Germans. It laid down that the monetary mechanisms would expire after four years if no agreement were reached on the content of stage two. There were objections to this clause, which virtually turned stage one into a test-run. Jean Monnet telephoned me to warn me against such a clause. Benelux was critical of the French–German side-agreement.’75
Among the Benelux countries, the Netherlands broadly shared the German view 76 and sided with the ‘economists’ from the outset. As soon as the Werner Committee was set up, Finance Minister Johannes Hendrikus Witteveen gave the first indications of his government’s position in the negotiations by announcing that ‘the development of monetary cooperation should be based on the harmonisation of economic policies’. 77
It is worth noting that in European policy the Foreign Ministry took the lead, whereas the coordination of the Netherlands’ monetary policy for Europe was a matter for the Finance Ministry. 78 Even if overall cooperation between these two institutions ran smoothly, generally speaking, this two-headed approach brought out certain diverging interests which created tension. For example, at a Cabinet meeting after the publication of the interim Werner Report, Witteveen reminded his ministerial colleagues that ‘at the Hague summit, it was decided, under pressure from the Foreign Minister, that European monetary integration should be carried out without delay. This has always been a cause of concern to the undersigned.’ 79 In the end, ‘the discussions which took place in the various [Dutch] bodies enabled a broad consensus to be reached […] and it was collegiality […] which used to win the day when it came to taking decisions.’ 80
On 26 May 1970, when the Werner Committee’s interim report had just been completed, Witteveen gave a speech to the Amsterdam Chamber of Commerce in which he came out in favour of a monetary union with a single, common currency, managed by a European central bank and a European Finance Ministry. A common currency — which amounted to the same thing as a single currency in that once it was introduced, the national currencies should cease to exist — was seen as vital in order to make European monetary unification irreversible. Pooling their reserves (the currencies) would make it possible for the participating countries to defend external monetary parity more effectively. According to the minister, the ground for the success of economic and monetary union would be prepared, in particular, by solid economic, budgetary and political integration of the Member States; in other words, by giving primacy to an economic union. The ‘European Finance Ministry’ that he envisaged would be in charge not just of the Community budget but also of the national budgets, which he would supervise directly. In these circumstances, the autonomy of national Finance Ministers subordinate to this supranational body would be confined basically to executive tasks. 81
A few days before the final Werner Report was published, the Dutch Ministry of Finance produced an analysis of the document for the members of the Cabinet, evaluating it with regard to the position defended by the Netherlands during the negotiations, which was close to the ‘German model’. 82 The Werner Committee drew a number of conclusions from it with respect to the institutional reform of the Communities, broadly in keeping with the Dutch line of argument (which was made by the Minister for Finance, Witteveen, in the aforementioned lecture he gave on 26 May 1970). This called for the establishment of a central administrative body, independent of the national governments, which would take on major powers in the economic sphere, as well as the setting up of a Community central bank system on the lines of the United States Federal Reserve System. The transfer of powers from national governments to the central Community administrative body would have to go hand in hand with the transfer of the corresponding powers from national parliaments to an elected European parliament. The Dutch analysis emphasised that sustained efforts would have to be made in the coming years as regards the harmonisation of economic policies. The Member States would have to pursue common objectives. If economic policy harmonisation were a success, it would be possible to set up a fund for European monetary cooperation. Looking forward to 1980, this could be the beginnings of a federal bank.
The Werner Report won backing from the Dutch Parliament 83 and government, 84 which considered it to be an ‘acceptable compromise’. 85 On 29 October 1970 the European Commission published its own report, based on the interim Werner Report and therefore skating over the sensitive question introduced by the final report, namely, that economic policy be made a Community matter and a new institutional structure be created. In the eyes of the Dutch Government, which had stated its support for the key points of the Werner Report, the Commission’s plan was unacceptable. 86
It is worth recalling that from the very outset of the work of the committee of experts, when the first differences of approach between the members were becoming increasingly obvious, Pierre Werner, from the chair, attempted to hammer out a joint Benelux position. The Finance Ministers and Central Bank Governors of the three countries met in Brussels for this purpose on 2 April 1970. 87 The discussions centred on defining the final aim of economic and monetary union, sketching out the means of achieving it, especially with respect to monetary and credit policy, budgetary and fiscal policy, the integrating of the money markets, and in the institutional field. Despite the efforts made, the desired objective was only achieved in part. 88 The Belgians and Luxembourgers were closer to the monetarist view taken by France, while the Dutch sided clearly with the German ‘economist’ approach. It was therefore impossible for an agreement within Benelux to take shape. The meeting was, however, an opportunity for the Belgians to set themselves up as the defenders of the idea of setting up an exchange equalisation fund to offset the floating exchange rates which were being more and more widely applied. 89 All through the work of the Werner Committee, too, and right up to the moment when the plan by stages was set in motion, they made their mark on the political negotiation and mediation front. 90 When tempers rose in the ad hoc group and consensus on a common position moved further and further away, the Belgians, with their country holding the Presidency of the Council of Ministers of the EC at the time, in the first half of 1970, lent their weight to the efforts at mediation being made by Pierre Werner in the chair. On 15 May 1970, for example, Prime Minister Gaston Eyskens wrote to Federal Chancellor Willy Brandt. 91 On the same day, Baron Snoy et d’Oppuers, the Minister for Finance, wrote to his Dutch counterpart Witteveen. 92 Stressing the political advantages for the future of European integration, these prominent Belgian figures urged their respective correspondents to make sure that the German and Dutch governments dropped their reservations and each gave their backing to the plan for economic and monetary union. These combined efforts at mediation (run in parallel, too, with the French–German negotiations) helped to ensure that both the Dutch and German Governments would drop their reservations. The interim Werner Report, firstly, and then the final report received consensus backing from all the parties involved, both among the experts and in the Council of Ministers (in its Ecofin and General Affairs configurations).
Belgium was, moreover, prominent from the outset on the European integration front and in particular that of economic and monetary union. 93 In the Werner Committee, 94 Belgium favoured the monetary approach, 95 which was seen as the catalyst to economic convergence, but it was gradually won over to the arguments for a symmetrical economic and monetary union and to the underlying principle of the plan by stages, that progress on the economic and monetary fronts should take place in parallel. 96
When the Werner Report was published, reaction in Belgium was positive. During the political consultations between Belgium and Germany on 14 October 1970, the Foreign Minister Pierre Harmel to put forward his government’s official position, stressing ‘the paramount importance that the Belgian Government attaches to carrying out the plan for economic and monetary union (the Werner Plan). The Community must now find a method which makes it possible to give maximum political impact to the decisions it will have to take on this question.’ 97 Keen to secure a consensus, he submitted to his German opposite number Walter Scheel a draft programme of action and joint consultations between the Six, to be considered after the official presentation of the report to the Council of Ministers on 26–27 October 1970. The dynamics were as follows: to begin with, the governments would be given a period for consideration and clarification during which they could undertake any studies which might be needed. The Council would then, at its meeting in November, give the Werner Report a first reading, with decisions on implementing it probably being taken in the first quarter of 1971. On the basis of this timetable, the governments were asked to evaluate the impact the recommendations in the Werner Plan would have on their shared future and to act accordingly. ‘We are faced with a fundamental choice here. Either we confine ourselves to confirming, and no more than that, the guidelines and objectives in the Werner Plan, focusing exclusively on the first, experimental stage. Or, taking the Hague objective as our starting point, we are prepared to express our determination to reach the final objective by taking a long-term political decision to be put into effect in several stages. Just like the mechanisms set up for the Treaty of Rome, the transition from one stage to another would be obligatory, unless the Council decided otherwise.’ 98 Supposing the Community were prepared to take a decision of that kind, it would have to adopt a very cautious line of conduct, avoiding too exclusive a focus on stage one by emphasising — ‘formally’ — the political character of its decision and starting work on preparing the ground for the ensuing stages, including the setting up of the appropriate legal instruments. Such a decision, and conduct in line with it, would make it possible for the United Kingdom and the other applicants for membership to associate themselves with the basic political option. At the same time, the new legal instruments should not enter into force until after the enlargement of the Community. Scheel, the German Minister, once again hailed ‘this exceptional opportunity which the current political situation gives us to push ahead [along the economic and monetary path] with the work of European integration’. 99 Harmel and Scheel agreed that Belgium should consult its partners in the Benelux and Germany should consult the two other Member States (France and Italy), so that the strategy which had been sketched out could start to take shape.
Nothing came of this, as France quickly made clear that it disagreed with its other five partners. The unofficial joint consultation session between the Finance Ministers planned for 9 November was cancelled 100 and four days later the French Government announced its refusal to set firm deadlines or to address the question of the Community’s institutional structure. It nevertheless reaffirmed its attachment to the aspirations set out in the final communiqué from the Hague Conference regarding economic and monetary union. Since the Council of Ministers’ meeting on 24 and 25 November ended with general declarations, in other words without any practical results, the Belgian Government decided to continue with its attempts at mediation. From then on, Belgium, together with its natural ally Luxembourg, conducted a diplomatic offensive in the narrower, more technical setting of Coreper. 101 In a situation where there was deadlock over the very principles behind economic and monetary union, 102 the Belgian approach was to focus efforts on defining precisely and in detail the content of stage one, while there and then giving a firm commitment to carrying out the final objective at the end of a decade, on 1 January 1980 at the latest. ‘By proceeding in this way, we draw our inspiration from our predecessors in 1957, since we would be giving those who will succeed us between now and 1980 the task of making decisive progress along the path of European unification, while at the same time allowing them to avail themselves of a commitment given in 1970 in order to overcome any obstacles which may arise.’ 103
The failure of the Council meeting of 14 and 15 December 1970 104 was a disappointment. The Belgians shared their feelings on this with the Luxembourgers, who had long been committed to economic and monetary integration. 105 Prime Minister Gaston Eyskens wrote to Pierre Werner of ‘the remarkable work done under your chairmanship, during which you persevered with great skill in proposing solutions and reconciling different points of view and thereby succeeded in determining the options and methods for achieving economic and monetary union. […] I understand and share the regrets to which the absence of a decision from the Council of the Minister of the EEC may give rise. […] In analysing the differences of view, you yourself have pointed out the path towards a solution which could be acceptable to all, a solution which, as you say, would go some way towards singling out the vital and logical features of an economic and monetary union while allowing for the requisite sense of pragmatism which must dictate the first steps taken in this undertaking.’ 106 It was also an opportunity to restate the unfailing commitment of the Belgian Government, ‘which would continue to give these plans its full support’. 107
Italy warmly welcomed the publication of the Werner Report, which prominent Italian figures had made a notable contribution to drafting. 108 The plan by stages took up ideas close to Italy’s heart, 109 including, in particular, the principle of making progress in parallel on the coordination of economic policies and monetary unification, 110 enhanced cooperation between the central banks, which were to act with full independence, as a preliminary stage in the establishment of an exchange-rate stabilisation fund, 111 the harmonisation of monetary cooperation instruments, the prospects for a common regional policy targeted on development or indeed the need to consult employers and labour in the major decisions on monetary cooperation. 112
The publication on 29 October 1970 of the Commission’s proposals, which were based on the Werner Report but perceptibly diluted it, 113 provoked a sense of dissatisfaction. At the meeting of the Committee of Governors of the Central Banks, the Italian members considered that the Commission’s proposals lacked clarity and were only of symbolic value. 114 They believed that, in order to make concrete progress towards economic and monetary union, action should be taken to bring about genuine convergence in economic development and monetary cooperation between the partners. 115 The government in Rome ‘would have preferred the Werner Report to have been taken into account in full’ 116 by the Commission, but they had to be practical. Given the antagonisms among the Six, the Italians advocated the adoption of a political decision for the establishment of stage one of economic and monetary union from 1 January 1971, with a clear statement of the final objective and the deadline for reaching the final stage. 117 Italy thus joined the Belgium–Luxembourg front and worked towards that objective within Coreper. 118
At the Council of Ministers’ meeting of 8 and 9 February 1971, an agreement based on the French–German consultations (the Paris Summit held on 25 January 1971) concerning the first stage of the Werner Plan (due to run from 1 July 1971 to 31 December 1973) was hammered out at the eleventh hour. 119 The agreement took the form of the resolution on the establishment by stages of economic and monetary union which the Council and the representatives of the Member States’ governments officially ratified six weeks later. 120 On 10 February 1971, the Federal Minister for Economic Affairs, Karl Schiller, commented on the launch of economic and monetary union following the previous day’s talks. 121 In a resolutely political declaration, he said that he was ‘very satisfied to have reached an agreement. Given the part which the Federal Republic played last year within the Werner Group and the Council, this success in Brussels bears eloquent witness to the fact that in our policy we have resolutely committed ourselves to the policy of opening to the West and the policy of integration and have helped to make it move forward.’ 122 Bonn cherished the hope that, to save the monetary measures in stage one, Paris would then make concessions on the economic policy recommended for stage two. Accepting monetary constraints right from the initial stage was a risk that the Germans took on without any guarantees as to the future harmonisation of economic policies or with respect to the building of institutional structures. 123 The federal government made these concessions in the belief that its insistence on the adoption, in full, of the provisions contained in the Werner Report could trigger a fresh crisis within the Six, at the political cost of seeing the nascent monetary cooperation becoming bogged down.
Looking ahead to UK accession, the Werner Committee examined the issues surrounding the pound sterling in the context of an economic and monetary union in the Community. 124 It was therefore quite natural that the UK should take an interest in the Werner Report. 125 As the ad hoc committee produced its interim report, 126 in London the Conservative victory in the elections of 18 June 1970 saw power pass into the hands of the government led by Edward Heath. 127 The new Prime Minister publicly expressed his commitment to his country’s membership of the European Community and stated what in his opinion were the sound reasons for economic and monetary union both for Western Europe and for the United Kingdom. 128 The whole of British Government action was based on this line. Consequently, both the Treasury 129 and the Foreign Office, which had previously resisted the idea of a supranational Europe, now found themselves forced to support a policy of membership of which they feared the monetary consequences above anything else.
The final version of the Werner Report was carefully studied in London. 130 As the document focused on the three-year first stage and its implementation had few consequences for the United Kingdom (the strengthening of the consultation procedure would possibly involve British participation), the British Government’s attitude was on balance positive. Pierre Werner involved himself heavily in the drafting of the English version of the report, of which he wrote some key passages himself. He made a hefty contribution to the work of disseminating it in the UK and explained he principles and concepts behind it in debates and lectures which he gave with his opposite number, and later friend, Edward Heath. 131
In November 1970, the UK Foreign Office, which was negotiating the terms of UK accession to the European Communities at the time, reacted officially to the Werner Report and and the second Barre Plan, 132 and thus summarised the line the British were taking in the negotiations with the Six. With a view to accession in 1973, the Foreign Office spoke of the revolutionary and radical changes which the plan by stages presaged over the course of ten years. The political and economic implications for the United Kingdom were considerable, but once it had been agreed to put in the effort, it would have to be carried through to the end if it was to bear fruit. 133 The concepts of ‘sovereignty’, ‘exchange rates’ and ‘monetary parity’, as well as the timetable for implementing the binding measures in the Werner Report, sparked off lively debate and triggered arguments. The British were not against the idea of a single currency in the future, but they were against the prospect of taking part in a European monetary system before becoming a full member of the Community. They were also concerned about the status and management of the pound sterling — a national currency and at the same time an international reserve currency — in a Europe which was a monetary Community. The coordination of short- and medium-term economic policies and the other implications in terms of monetary cooperation as laid down in the second Barre Plan gave rise to further worries and were also matters to be dealt with in the accession negotiations. The UK side made a point of singling out the special characteristics which were to be safeguarded (with respect to currency and structural and regional policy) and the factors which made it different from or set it against the other Member States, while at the same time hoping that solutions acceptable to everyone could be found. What particularly concerned it was the institutional structure of the Community 134 and the extent of the transfer of national powers to the Community level, both in stage one (which was regarded as experimental) and in stage two, where a monetary union built around a single currency would come into being. The United Kingdom decided to commit itself to the path of economic and monetary union, with the priority being given to the practical measures in stage one (in relation to the Barre Plan) and the establishment of coordination of economic and monetary policies. As for thinking about the next stage, that required ‘experience and clarity’ and was left for later.
The work of the Werner Committee was followed with interest in Washington, both in political circles and among economists, academics and the media. 135 Pierre Werner’s private papers allude to regular contacts (official and unofficial) with the federal and political authorities in the United States. The good relations he had with financial circles on the other side of the Atlantic, with Luxembourg bankers being particularly well represented in the United States, and the cordial relations he kept up with the US Ambassadors in Luxembourg (especially Kingdon Gould) all gave him opportunities for gathering the material that interested him in terms of the intrinsically international dimension of the plan by stages. He communicated with the Chairman of the Federal Reserve Board of the United States, Arthur Burns. At the same time, the meetings of the IMF in 1970 and the many formal occasions associated with them were chances for the members of the Werner Group and the Finance Ministers of the Six to have informal conversations with their American colleagues (and other international experts) and thereby gauge their thoughts on various aspects of the plan by stages. Those active on this front included Bernard Clappier, Chairman of the Monetary Affairs Committee, and Rinaldo Ossola, member of the Committee of Governors of the Central Banks. 136 Pierre Werner also met the Managing Director of the IMF on two occasions, having already consulted him on the European monetary identity through Jean Monnet. American officials seem to have refrained from passing any observations on the monetary discussions in Europe, but they inquired in detail into the drafting of the plan by stages and the disputes which broke out during the work of the Werner Group and which were widely reported in the press in the United States. A few days after the adoption of the interim report, Pierre Werner and Bernard Clappier held talks with American diplomats at which they stated that the paper finally reconciled divergent approaches and that economic union and monetary union had to work in tandem. Political union was a longer-term objective underlying the other two. Foreshadowing Europe’s future monetary identity, they rejected any notion of giving the European currencies increased flexibility within the International Monetary System. ‘This opposition is a disappointment for the United States, which seems to appreciate the benefits of monetary union only insofar as it is a way of relieving America’s monetary position and smoothing the path towards the development of a more flexible exchange system.’ 137 Washington therefore had reservations as regards a European monetary bloc, which seemed to be prompted by anti-American motives. Through economic and monetary union, it was alleged that Europe was looking for a form of monetary sovereignty which had been lost to the advantage of the US dollar. 138 The rivalry which would break out between the European currency and the dollar would be such as to moderate American excesses to some degree, and among other things would lead to a less expansionist economic policy. 139
2 See section 4.6, ‘The Werner Report in the international media of the time’.
3 Werner, Pierre, Itinéraires luxembourgeois et européens. Évolutions et souvenirs: 1945–1985, 2 volumes, Éditions Saint-Paul, Luxembourg, 1992, Volume 2, p. 131
4 The ultimate aim of the plan by stages was that ‘[economic and monetary] union will make it possible to ensure growth and stability within the Community and reinforce the contribution it can make to economic and monetary equilibrium in the world and make it a pillar of stability’. See the ‘Report to the Council and the Commission on the realisation by stages of economic and monetary union in the Community’ (the Werner Report)’, document L 6.956/II/70-D, Luxembourg, 8 October 1970, in Official Journal of the European Communities, No C 136, Supplement to Bulletin 11/1970, Luxembourg, 11 November 1970, p . 24. (Document consulted on 10 October 2012.)
5 The official German position on monetary integration was set out in the memorandum which the Minister for Economic Affairs, Karl Schiller, submitted on 12 February 1970, and which is better known as the Schiller Plan. The Plan looked ahead to the achievement of economic and monetary union in four stages whose duration was not defined but of which the final stage was to start in 1978. The first two stages (1970–1975) were the most important, their aims being the harmonisation of economic, monetary and fiscal policy and the setting up of a system of medium-term assistance in the event of serious disequilibrium in the balance of payments. The final goal — the setting of definitive exchange rates, or indeed the introduction of a European currency unit, and the conversion of the Committee of Governors into a European Central Bank — was only sketched in outline, without any indication of how it was to be achieved in practice, or any timetable. As part of the Werner Committee’s initial documentation, the Schiller Plan was published on 12 February 1970 in Tagesnachrichten des Bundesministeriums für Wirtschaft [News of the day from the Federal Ministry of Economic Affairs], 27 February 1970, No 6122. It was recently reproduced in Tietmeyer, Hans, Währungsstabilität für Europa. Beiträge, Reden und Dokumente zur europäischen Währungsintegration aus vier Jahrzehnten, Nomos, Baden-Baden, 1996, pp. 88–94.
6 See Letter from Karl Schiller to the Chancellor of the Federal Republic of Germany, Mr Willy Brandt. The Federal Minister for Economic Affairs, Bonn, 14 October 1970, Gesch.-Z:E1-IA1-03 00 00/10 — (n.i.E). Copy from the Federal Archives, Koblenz. BArch B 102 (Bundesministerium für Wirtschaft) / 93463
8 For the official position of the President of the Bundesbank, see Klasen, Karl, Die Verwirklichung der Wirtschafts- und Währungsunion in der EWG aus der Sicht der Deutschen Bundesbank, Europa-Archiv, Collection of articles No 13, Bonn, 1970, pp. 449–458.
9 See section 1.3, ‘The economic and monetary environment at the end of the 1960s’.
10 See section 2, ‘The establishment of the Werner Committee and an account of its work (March–October 1970)’.
11 ‘Draft summary report of the 35th Conference of EEC Finance Ministers, Venice, 29 and 30 May 1970’, Confidential, ref. ORII/57/70-F, Commission of the European Communities, Directorate-General for Economic and Financial Affairs, Brussels, 5 June 1970, p. 4. Historical Archives of the European Commission. (Document consulted on 10 October 2012.)
12 The President of the Bundesbank, Otto Pöhl, issued repeated warnings that ‘monetary integration could not go ahead faster than overall economic integration’.
13 325th meeting of the Board of the Central Bank, Deutsche Bundesbank, 4 November 1970, minutes, p. 13. Historical Archives of the Bundesbank
14 315th meeting of the Board of the Central Bank, Deutsche Bundesbank, 3 June 1970, minutes, pp. 12–15. Historical Archives of the Bundesbank.
15 Conversation between Federal Chancellor Brandt and Belgian Foreign Minister Harmel. 14 October 1970. Doc. 468. In Akten zur Auswärtigen Politik der Bundesrepublik Deutschland. 1970. Band III (1.September bis 31.Dezember). [Documents on the Foreign Policy of the Federal Republic of Germany. 1970. Volume III (1 September to 31 December)]. Published at the request of the Foreign Ministry by the Institut für Zeitgeschichte. R. Oldenburg Verlag, Munich, 2001, pp. 1752–1754
16 Record of the conversation between the Federal Chancellor and Belgian Foreign Minister Harmel on 14 October 1970, 12.30 p.m. Office of the Federal Chancellor, Group II/1, Bonn, 16 October 1970. Copy from the Federal Archives, Koblenz, BArch B 102 (Bundesministerium für Wirtschaft) / 93463
17 Letter from Willy Brandt to Karl Schiller, 21 October 1970. Historical Archives of the Bundesbank, N.2, Vol. 156, quoted in Wilkens, Andreas, ‘Une tentative prématurée? L’Allemagne, la France et les balbutiements de l’Europe monétaire (1969–1974)’. In Dynamiques européennes. Nouvel espace. Nouveaux acteurs. 1969–1981, Du Réau, Élisabeth; Frank, Robert (Ed), Publications de la Sorbonne, Paris, 2002
18 ‘Statement on European policy, 6 November 1970’. In Brandt, Willy, Reden und Interviews, Vol. I, p. 238
19 As Pierre Werner describes it in his memoirs, in the run-up to the Hague Summit (1–2 December 1969), Chancellor Brandt, who was convinced that establishing real monetary cooperation was a way of deepening the process of Community integration, ‘proposed that the possibility of setting up a common currency fund, a monetary reserve fund, an idea of Professor Triffin’s on a suggestion from Jean Monnet, be studied’. The German Minister for Economic Affairs and Finance, Karl Schiller, took an opposing view, and was in favour of establishing ‘joint consultation among the Member States on international monetary questions’. The lack of internal consensus made the German Government sceptical as to the feasibility of Europe’s economic and monetary integration plans, and that scepticism led to a certain degree of reservation during the meetings of the ad hoc group.
20 ‘Communication and proposals from the Commission to the Council on the establishment by stages of economic and monetary union’, document COM(70)1250, 29 October 1970, in Official Journal of the European Communities, Annex C 140 of 26 November 1970, supplement to Bulletin 11/1970, Luxembourg. (Document consulted on 10 October 2012.)
21 See ‘Plan by stages for the achievement of economic and monetary union, communication and proposals from the Commission to the Council on the establishment by stages of economic and monetary union’, (DOK. COM(70), 29 October 1970 (Subdivision E A, Bonn, 3 November 1970). Letter from the State Secretary at the Federal Ministry of Economic Affairs, Dr Rohwedder, Bonn, 4 November 1970, to the Parliamentary State Secretary to the Head of the Federal Chancellor’s Office, Dr Katharina Focke. Copy from the Federal Archives
22 ‘Bonn kritisiert Interpretation des Werner-Plans durch Brüssel’ in Frankfurter Allgemeine Zeitung of 5 November 1970. (Document consulted on 10 October 2012.)
23 Opinion on the Report to the Council and the Commission on the attainment by stages of economic and monetary union in the Community. Copy of a note by the President of the Bundesrat. Bonn, 4 December 1970. Annex to the letter from the President of the Bundesrat on 4 December 1970 to the Federal Chancellor. Copy from the Federal Archives, Koblenz. BArch B 102 (Bundesministerium für Wirtschaft) / 161037
24 Réalisation par étapes de l’Union économique et monétaire de la Communauté [‘Establishment of economic and monetary union by stages’]. Minutes of proceedings, sitting of 18 November 1970, CARDOC, European Parliament. In Official Journal of the European Communities, Annex No 151/23 of 29 December 1970, pp. 98–100. (Document consulted on 10 October 2012.)
25 ‘Official German statements in 1970 on Economic and Monetary Union and European political unification’, 11 January 1971. Ministry of Foreign and European Affairs of the French Republic, EC Collection, Directorate for Economic and Financial Affairs, Economic Cooperation Department, PM series, Vol. 972 EMU, File PM 19.3. Diplomatic Archives, La Courneuve
27 See section 3.4, ‘Economists v monetarists — agreements and clashes in the drafting of the Werner Report’.
28 Press conference on European political cooperation given by Georges Pompidou, President of the French Republic. Paris, 2 July 1970. (Document consulted on 10 October 2012.)
29 Pompidou, Georges, Entretiens et discours, Volume II: 1968–1974, Plon, Paris, 1975. 321 p.
30 On 10 November 1970, a secret German diplomatic dispatch gave a detailed report of the split in the ranks of the French Government, in particular, over the plan by stages. See Tgb. Nr. Room. i-7306/5848/70 Vs-Vertr. V.10.11.1970, Vs-Vertraulich, Official Secret, re French position on Werner Report, Federal Ministry of Economic Affairs, Secret, 10 November 1970. Copy from the Federal Archives, Koblenz. BArch B 102 (Bundesministerium für Wirtschaft) / 93465
31 Michel Debré (1912–1996), French politician and statesman. From 1958 he was Minister for Justice in the third de Gaulle Government, and Prime Minister from January 1959, resigning in April 1962 following a disagreement with President de Gaulle over French Algeria. He later held the offices of Minister for Economic Affairs and Finance from 1966 to 1968, Minister for Foreign Affairs from 1968 to 1969 and, lastly, Minister for National Defence from 1969 to 1973.
32 Michel Debré’s objections to a common European currency were summarised in a letter he wrote to the Belgian-American economist Robert Triffin, who played an important part in the plans for economic and monetary union put forward by Jean Monnet and the Action Committee for a United States of Europe. Debré considered that the question of a common currency could not be raised as long as Europe had not decided to be independent of the United States. ‘Letter from Michel Debré to Robert Triffin, 18 August 1970’. Triffin Archives, Université catholique de Louvain-la-Neuve. Reproduced in Bossuat, Gérard, Faire l’Europe sans défaire la France. 60 ans de politique d’unité européenne des gouvernements et des présidents de la République française (1943–2003), Éditions PIE Peter Lang, Brussels, 2005, pp. 432–433
33 Jacques Duhamel (1924–1977) was a French politician and statesman. He was elected to the National Assembly in 1962 and re-elected in 1967, 1968 and 1973 under a variety of centrist banners. He chaired the political party Centre démocratie et progrès from 1969. Under the presidency of Georges Pompidou, he was Minister for Agriculture from 1969 to 1971, then Minister for Cultural Affairs from 1971 to 1973.
34 René Pleven (1901–1993) was a French politician and statesman. He was Prime Minister and several times a Minister during the 4th Republic and again in the 5th Republic, under the presidency of Georges Pompidou. He served as Minister for Justice from 1969 to 1973.
35 See Tgb. Nr. Room. i-7306/5848/70 Vs-Vertr. V.10.11.1970, Vs-Vertraulich, Official Secret, re French position on Werner Report. Federal Ministry of Economic Affairs, Secret, 10 November 1970. Copy from the Federal Archives, Koblenz. BArch B 102 (Bundesministerium für Wirtschaft) / 93465
36 The main reason for General de Gaulle’s hostility to UK membership of the European Communities was the monetary question. See the press conference given by the President of the French Republic at the Elysée on 27 November 1967. (Document consulted on 10 October 2012.)
37 It was attended by Mr Chaban-Delmas, Mr Schumann, Mr Giscard d’Estaing, Mr Duhamel, Mr Donnedieu de Vabres, Mr Alphand, Mr Wormser, Mr Boegner, Mr Nors, Mr Esteva (head of the executive office of Mr Ortoli, Minister for Industrial Development, for whom he acted as substitute), Mr Clappier, Mr Larre and Mr Brunet.
38 Minutes of the select Cabinet meeting on European affairs of Wednesday 18 November at 3.20 p.m.’, French Archives, 5 AG 2, vol. 1043, point II
41 The French members of the Werner Group were Bernard Clappier, Chairman of the Monetary Committee, and his deputy Jean-Michel Bloch-Lainé.
42 Werner, Pierre, Itinéraires, Vol. 2, p. 132
43 See Bussiere, Eric; Willaert, Émilie, Un projet pour l’Europe: Georges Pompidou et la construction européenne, PIE Peter Lang, Brussels, 2010, Collection Georges Pompidou — Archives no. 4
44 A third Frenchman, Georges Morelli (an official in DGII) was in charge of the technical secretariat of the Werner Committee.
45 See section 2, ‘The establishment of the Werner Committee and an account of its work (March–October 1970)’.
46 Bernard, Jean-René, ‘La position du gouvernement français face au plan Werner’, in Le rôle des ministères des Finances et de l’Économie dans la construction européenne (1957–1978), 2 volumes, Paris. Publication of the proceedings of the preparatory sessions held in Bercy on 14 November 1997 and 29 January 1998. Comité pour l’histoire économique et financière de la France, 2002, Volume 2, pp. 127–132
47 Bloch-Lainé, Jean-Michel, ‘Le plan Werner: Quels enjeux? Quelle démarche?’, in Le rôle des ministères des Finances et de l’Économie dans la construction européenne (1957–1978), pp.123–126
48 Telegram from Paris to the Federal Minister for Finance and the Bundesbank, No 3071 of 22 October 1970, AZ.WI 3a2-84.01; ‘French position on the Werner Report’, v.19.10 70, v.21.10.70. Signed Ruete. Copy from the Federal Archives, Koblenz
49 This was an oral question which the UDR Member for the Pas-de-Calais, Jacques Vendroux, General de Gaulle’s brother-in-law, put to the Foreign Minister. This speech — constituting the first part of the Telegram from Paris to the Federal Minister of Finance and the Bundesbank, No 3071 of 22 October 1970, AZ.WI 3a2-84.01; ‘French attitude to Werner Report’, v.19.10 70, v.21.10.70. Signed Ruete. Copy from the Federal Archives, Koblenz — was carried by Le Monde in its 22 October 1970 edition. Extract in the Pierre Werner family archives, ref. PW 048, case entitled ‘Intégration monétaire de l’Europe. Le Plan Werner: 1970’ [Monetary integration of Europe. The Werner Plan: 1970].
50 Verbatim record of the 43rd sitting. 3rd sitting of Thursday, 5 November 1970, National Assembly, Constitution of 4 October 1958, 4th legislature. First ordinary session 1970–1971, pp. 5181–5217. In the Pierre Werner family archives, ref. PW 048. (Document consulted on 10 October 2012.)
51 Speech by RPF Member Michel-Habib Deloncle. Verbatim record of the 43rd sitting. 3rd sitting of Thursday, 5 November 1970, National Assembly, Constitution of 4 October 1958, 4th legislature. First ordinary session 1970–1971, p. 5201. In the Pierre Werner family archives, ref. PW 048.
52 See, too, the speech by the Communist member Roland Leroy: ‘Today […] we are being told that the Commission of the EEC has, essentially, adopted the content of the Werner Report. Does that mean that when the next Budget comes round, in 1972, the supranational institutions would recommend, as the Werner Report says, “in a specific and detailed manner to each Member State”, guidelines for the economic policy it will have to follow? That would be stage one, because the proposal after that is that all “the essential features of the whole of the public budgets” will be decided on at the Community level. To quote the Werner Report again: “The Community’s centre of decision must be in a position to influence national budgets … its responsibility will extend to other domains of economic and social policy which will have been transferred to the Community level.” And here the grand objective becomes clear: “The action will entail, first further coordination of national policies, then their harmonization by the adoption of directives or common decisions, and finally the transfer of responsibility from the national authorities to Community authorities.” It is very clearly explained that “these transfers of responsibility represent a process of fundamental political significance which entails the progressive development of political cooperation. The economic and monetary union thus appears as a leaven for the development of political union which in the long run it will be unable to do without.”’ Speech by PCF Member Roland Leroy. Verbatim record of the 43rd sitting. 3rd sitting of Thursday, 5 November 1970, National Assembly, Constitution of 4 October 1958, 4th legislature. First ordinary session 1970–1971, p. 5206. In the Pierre Werner family archives, ref. PW 048.
53 Ibid., p. 5205.
54 Speech by UDF Member Aymar Achille-Fould, Verbatim record of the 43rd sitting. 3rd sitting of Thursday, 5 November 1970, National Assembly, Constitution of 4 October 1958, 4th legislature. First ordinary session 1970–1971, p. 5208. In the Pierre Werner family archives, ref. PW 048.
55 Germany was openly sceptical about the financing clauses so long as there had been no tangible achievements in terms of policy coordination.
56 This letter was sent at the suggestion of Gaston Thorn, Foreign Minister in the Luxembourg Government, who was very keen on promoting Luxembourg’s place in a united Europe and supported Pierre Werner in his role as chairman of the committee of experts.
57 Letter of 29 December 1970 from the Prime Minister of Luxembourg to the Federal Chancellor. Federal Chancellor’s Office, Group II/1, Bonn, 5 January 1971. Copy from the Federal Archives, Koblenz. BArch B 102 (Bundesministerium für Wirtschaft) / 161037. (Document consulted on 10 October 2012.)
58 Letter from Willy Brandt to Pierre Werner, Bonn, 1 February 1971. Pierre Werner family archives, ref. PW 048. (Document consulted on 10 October 2012.)
59 The ‘escape clause’, applicable as from stage two of economic and monetary union, would mean that if a country refused to follow the Community’s recommendations for rationalising its economy, each of the partners could withdraw from its commitment to mutual assistance with respect to it.
60 See Results of the French-German consultations, Summary Report on the results of the French-German consultations on 25 and 26 January 1971, Subdivision E.A. Bonn, Dr Hans Tietmeyer, Paris, 27 January 1971. Copy from the Federal Archives, Koblenz. BArch B 102 (Bundesministerium für Wirtschaft) / 161038. (Document consulted on 10 October 2012.)
61 Gaston Thorn sent Pierre Werner a diplomatic report dated 27 January 1970 via the Luxembourg Ambassador in the Federal Republic of Germany. The report contained a briefing on the discussions the Luxembourg diplomat had had with German State Secretary von Braun and summarised the latter’s remarks regarding the conclusions of the French-German summit on economic and monetary union. On this diplomatic cable, the Foreign Minister wrote: ‘To the Minister of State, for information. This report, basically concerning economic and monetary union, will no doubt be of interest to you. I have just received it on 28th at 5.00 p.m. and in view of its importance I am having it sent to you.’ Pierre Werner family archives, ref. PW 048.
62 See Meeting between Pompidou and Brandt, 25.1.1971, 12.00–13.15 p.m., French Archives, 5 AG 2, Vol. 105. Faced with Pompidou, the Chancellor nevertheless tried to keep the overall prospect of the process open by hoping for an agreement with the French President on ‘what will have to be done when stage one is over’.
63 It was Karl Schiller who, during the negotiations on 14 and 15 December 1970, called for the insertion of an ‘escape clause’ which would allow the monetary integration measures to be suspended if the degree of convergence of the Member States’ economies was deemed to be inadequate.
64 Diplomatic cable of 27 January 1970 from the Luxembourg Ambassador in the Federal Republic of Germany reporting on his talks with German State Secretary von Braun. Pierre Werner family archives, ref. PW 048. (Document consulted on 10 October 2012.)
65 The German delegates were State Secretaries Johann-Baptist. Schöllhorn (former member of the Werner Committee) and Detlev Karsten Rohwedder, as well as Hans Tietmeyer (former alternate member of the Werner Committee).
66 Confidential. Internal note on the talks between Vice-President Barre and Minister Schiller in Bonn on 22 January 1971 concerning the plan by stages for economic and monetary union. Subdivision E.A., Dr Hans Tietmeyer, Bonn, 22 January 1971. Copy from the Federal Archives, Koblenz. BArch B 102 (Bundesministerium für Wirtschaft) / 161038
67 ‘Report to the Council and the Commission on the realisation by stages of economic and monetary union in the Community (Werner Report)’, Luxembourg, 8 October 1970, supplement to Bulletin 11/1970
68 Werner, Pierre. Itinéraires, Vol. 2, p. 134
69 ‘French-German talks at the Quai d’Orsay’ — diplomatic report, 25 January 1971, Ministry of Foreign and European Affairs of the French Republic, EC Collection, Directorate for Economic and Financial Affairs, Economic Cooperation Department, series PM Vol. 973, ‘Summit Meetings’ section, file PM 19.6.1. French Diplomatic Archives, La Courneuve. See also Talks between Federal Chancellor Brandt and President Pompidou in Paris, 25 January 1971, Dok. 27. ZA 5-3.1/71. Secret. In Akten zur Auswärtigen Politik der Bundesrepublik Deutschland. 1971. Band I (1.Januar bis 30 April). Published at the request of the Foreign Ministry by the Institut für Zeitgeschichte. R. Oldenburg Verlag, Munich, 2002, pp. 115–123. (Document consulted on 10 October 2012.)
70 See section 2, ‘The establishment of the Werner Committee and an account of its work (March–October 1970)’.
71 The Werner Report successfully reconciled two seemingly incompatible views which had clashed constantly during the work of the committee of experts. These were the view taken by France, the champion of the ‘monetarist’ position (advocating the growing stabilisation of exchange rates until they were fixed irreversibly), and that of Germany, the champion of the ‘economist’ approach (insisting that economic and monetary policies and performances must converge before there could be any union). The Werner Report provided for progress taking place on both fronts in parallel.
72 In the building of economic and monetary union, Germany considered it essential that, alongside the future Central Bank, there should be a political authority responsible for firm European coordination of national budgetary policies. France was categorically opposed to this on the grounds that it would truncate national sovereignty in this field too drastically. As no agreement was reached, the decision was deferred, and the debate came to an end when this first plan for monetary unification was dropped following the collapse of the Bretton Woods system. See ‘Talks between Federal Chancellor Brandt and President Pompidou in Paris’, 25 January 1971 Dok.27. ZA 5-3.1/71. Secret. In Akten zur Auswärtigen Politik der Bundesrepublik Deutschland. 1971. Band I (1.Januar bis 30 April). Published at the request of the Foreign Ministry by the Institut für Zeitgeschichte. R. Oldenburg Verlag, Munich, 2002, pp. 115–123
73 This stipulation was contained in the Schiller Plan — the German plan for an economic and monetary union published on 2 February 1970, of which the ad hoc committee took note from the start of its discussions — the only one not to provide for an automatic transition from one stage of economic and monetary union to the next, calling each time for a Council decision on the question. In Tagesnachrichten des Bundesministeriums für Wirtschaft, 27 February 1970, No 6122
74 ‘Foreign policy debate in the Bundestag: economic and monetary union’, Incoming diplomatic telegram No 601/09, Bonn, 30 January 1971, Ministry of Foreign and European Affairs of the French Republic, EC Collection, Directorate for Economic and Financial Affairs, Economic Cooperation Department, series PM Vol. 972, EMU/Bilateral Relations section, file PM 19.3. French Diplomatic Archives, La Courneuve. See also the interview with Jacques de Larosière: Reactions in France after the publication of the Werner Report (Paris, 22 May 2008), CVCE. (Document consulted on 10 October 2012.)
75 Werner, Pierre. Itinéraires, Vol. 2, p. 136
76 During the 1960s, the Dutch Government was a staunch defender of worldwide cooperation in the Bretton Woods system, which met the need the Netherlands felt to have fixed exchange rates and stable common rules. Because of this, European initiatives in the monetary sphere were seen as uninteresting, not to say pointless, and were rejected. The turning point in this approach came in the early 1970s when, following on from the plan by the Six to set up an economic and monetary union, and the impact of international monetary disruptions, the Dutch Government’s attitude to European monetary cooperation became increasingly positive. This was the spirit in which the conclusions of the Hague Summit (1–2 December 1969) and the creation of the Werner Committee, tasked with exploring ways of bringing about an economic and monetary union in the Community, were received.
77 Patijn, Schelto; Brugmans, Henri, Jalons dans l’Europe unie, Leiden, 1970, p. 216. In European aspects: A collection of studies relating to European integration, No 10
78 This problem was not peculiar to the Netherlands. The European dimension in economic policy was to move out of the domain of Foreign Ministers at the IGC of 1990–1991, where the Ministers for Economic Affairs and Finance took the lead in the negotiations and secured two declarations, annexed to the EC Treaty, recognising the power of the Ecofin Council over the General Affairs Council with regard to questions relating to economic and monetary union.
79 See Brouwer, Jan Willem; Harryvan, G. Anjo, ‘Les Pays-Bas et la coopération monétaire européenne, 1968–1972’, in Le rôle des ministères des Finances et de l’Economie dans la construction européenne (1957–1978), Actes du colloque tenu à Bercy les 26, 27 et 28 mai 1999, Volume 1, Paris, p. 98
80 Ibid., p. 87
81 See Catz, Paul, Politieke integratie nodig voor Europese monetaire unie. Witteveen vroeg zelf om spreekbeurt. Elseviers Weekblad, 27 June 1970. Witteveen was thus prefiguring the functions of the decision-making centre for economic policy which was later included in the Werner Report. A few days after this statement, at the Council meeting of 10 June 1970, the Netherlands and Germany successfully opposed the French-Belgian plan for reducing the margins for currency fluctuations between the Six, which was supposed to represent stage one of the path leading to monetary union. The Dutch stressed that it was out of the question to accept agreements designed to exclude any changes in parities without first attaining a certain degree of economic unification. This German-Dutch offensive against the vagueness of the economic integration mechanisms and the non-binding character of the conditions for economic convergence set out in the Werner Committee’s interim report eventually bore fruit. The final report submitted on 8 October, imbued as it was with the principle of parallel movement in economic progress and progress on monetary questions, made provision for the setting up of Community decision-making centre for economic policy and a Community system of central banks. These arrangements would make it possible to centralise the Community’s internal and external monetary policy and, at the same time, set limits on budgetary policy and short-term economic policy at the Community level.
82 See Analysis of the Werner Report by the Netherlands Finance Ministry. Pierre Werner family archives, ref. PW 048. Document dated 12–13 October 1970, probably the annex to a diplomatic cable addressed to Pierre Werner, Prime Minister and Finance Minister of the Grand Duchy of Luxembourg. The preamble to the analysis says that ‘the committee, which conducted a study under the direction of the Prime Minister of Luxembourg, Mr Werner, of a plan to be carried out in stages for an economic and monetary union in the European Communities, finalised its report last week. It will probably be sent to the Council and the European Commission in the next few days’. The analysis points out that, even though the Werner Committee had reached the conclusion that in an economic and monetary union the present currency units could possibly continue to exist, it was also adamant that the currencies in question must then be completely mutually convertible, without exchange rate fluctuations and at unchanging rates of parity. It would, however, be preferable to replace the currencies with a European currency unit. Furthermore, it would also be necessary for the creation of liquidity, monetary policy and credit policy to be centralised and for decisions on the main aspects of the Member States’ budgets to be taken at the Community level. (Document consulted on 10 October 2012.)
83 See Handelingen Tweede Kamer [Proceedings of the Second Chamber] 1970–1971, 15 October 1970, pp. 371–373. At the sitting of the Dutch House of Representatives on 15 October 1970, the Dutch Minister for Finance Johannes Witteveen gave a speech in favour of the Werner Report. (Document consulted on 10 October 2012.)
84 Cabinet meeting of 21 October 1970. The Werner Report was also approved by the majority of the Economic and Social Committee.
85 ‘Eindrapport Groep-Werner inzake Economische en Monetarie Unie’ [Final report of the Werner Group on economic and monetary union], 21 October 1970, Foreign Ministry, IIIrd section 913.100, No 5466, The Hague. See also the article ‘Naar een econonomische en monetaire unie’ published on 28 October 1970 in the review Economisch-Statistisch Berichten by Gerard Brouwers, chairman of the Conjunctural Policy Committee and member of the Werner Committee, in which he explains the principles and the substance of the plan for establishing an economic and monetary union in the Community drawn up by the ad hoc group. (Document consulted on 10 October 2012.)
86 Remarks of this kind also appear in the record of debates held on 21 December 1970 at which, during the adoption procedure for the national budget, the Standing Committee on Finance of the Dutch House of Representatives and the Minister for Finance consulted each other on the subject of the attainment by stages of an economic and monetary union in the Community. Kamerstuk Tweede Kamer 1970–1971 kamerstuknummer 10900 IX Bondernummer 10. (Document consulted on 10 October 2012.)
87 At this meeting, Belgium was represented by the Minister for Finance, Jean-Charles Snoy et d’Oppuers, and Baron Hubert Ansiaux, President of the National Bank (and also a member of the committee of experts in his capacity as Chairman of the Committee of Governors of the Central Banks), while the Netherlands was represented by the Minister for Finance, Johannes Hendrikus Witteveen, and the President of the Nederlandse Bank, Jelle Zijlstra. By virtue of the Belgian-Luxembourg monetary union, the National Bank of Belgium also represented the Grand Duchy. A close associate of Pierre Werner, the Minister of Finance, at that ministry also took part in the meeting. The exchanges at the Benelux meeting also covered the main lines of a study requested by the Werner Committee on the implications of UK membership for economic policy coordination, the money market and the fiscal field. The subjects raised included the strengthening of monetary solidarity, the consequences of possible future participation by the United Kingdom in the mechanisms for monetary cooperation, and the impact of the pound sterling on the European Reserve Fund.
88 ’Gesprek met Belgen en Luxemburgers over monetary unie in der E.E.G’ [Talks with Belgians and Luxembourgers about monetary union in the EEC], The Hague, 7 April 1970 (Willem Drees Junior), Ministry of Finance, Netherlands National Archives, Prime Minister’s Office, NA, 2.03.01 (Arch. AZ/KMP) inventory number 8864.
89 A search through the Pierre Werner family archives has shown that on 22 April 1970, Baron Hubert Ansiaux put before the committee of experts a note headed ‘Aspects juridiques et techniques d’une mise en commun des droits de tirage spéciaux’ [Legal and technical aspects of pooling the special drawing rights] in which he referred to SDR transfer operations between the EEC partners. Two days later, he responded to another request from Pierre Werner and sent him a confidential technical note ‘setting out the modus operandi and the merits of a European exchange equalisation fund’. These two papers were discussed at the meeting of 7 April 1970.
90 See section 2, ‘The establishment and of the Werner Committee and an account of its work (March–October 1970)’.
91 Letter sent on 15 May 1970 by the Prime Minister of Belgium, Gaston Eyskens, to the Federal Chancellor of Germany, Willy Brandt, on the work of the Werner Committee. Pierre Werner family archives, ref. PW 048. (Document consulted on 10 October 2012.)
92 Letter sent on 15 May 1970 by Baron Jean-Charles Snoy et d’Oppuers, Belgian Finance Minister, to his Dutch counterpart Johannes Hendrikus Witteveen on the work of the Werner Committee, and in particular the European exchange equalisation fund. Pierre Werner family archives, ref. PW 048. In his letter, Baron Snoy et d’Oppuers stressed the advantages of an exchange stabilisation fund, to be set up as early as stage one of the establishment of economic and monetary union. To highlight the merits of such a fund, he put forward arguments to which the economists’ camp could not fail to be responsive. One of the chief effects of the fund would be to stimulate greater convergence between economic policies, while harmonising the central banks’ policies on the foreign exchange markets. Five of the seven members of the Werner Committee were won over to that point of view. Despite certain reservations, Professor Brouwers never came out clearly against it. The German member was the only one to have opposed it. Certain fears he expressed regarding the over-complicated way in which the mechanism would work or its consequences in terms of the margins for fluctuation between the currencies of the Six were seen as technical difficulties which could be rectified. In the view of the German member, these minor obstacles must not under any circumstances stand in the way of setting up a body which proclaimed the Community’s monetary independence. (Document consulted on 10 October 2012.)
93 See sections 1.3, ‘The economic and monetary environment at the end of the 1960s’, 3.3, ‘The Committee of Governors of the Central Banks and the Werner Report’ and 3.4, ‘Economists v monetarists — agreements and clashes in the drafting of the Werner Report’.
94 The Werner Committee included among its members Hubert Ansiaux, President of the National Bank of Belgium and Chairman of the Committee of Governors of the Central Banks, and his alternate Jacques Mertens de Wilmars, both from Belgium. The Belgian Minister for Finance, Jean-Charles Snoy et d’Oppuers, also played a major part in the drafting of the plan by stages, as did the Belgian-American economist Robert Triffin, who made extensive contributions to the thinking on the major questions posed by EMU, and Jean Monnet, who regularly approached Europe’s heads of government on the subject. The Belgians made a substantial contribution to the success of the work done in the special-subject bodies, such as the Monetary Committee and the Committee of Governors of the Central Banks, as well as during the EC Presidency, which Belgium took on in the first half of 1970. The part Étienne Davignon played in European political unification deserves a mention too (the object of the Davignon Report adopted in Luxembourg on 27 October 1970 was to bring about progress in the field of political unification by stepping up cooperation on foreign policy).
95 The main reason for Belgium’s monetarist leanings was the importance of exchange-rate stability to the country’s economy, arising from the firm belief that without a single currency Belgium would never be safe from competitive devaluations which would in fact cause the single market to fail, plus the argument that the imposition of exchange-rate stability would be of benefit to budgetary and wage discipline.
96 The vision of a symmetrical economic and monetary union had already been put forward in ‘Un plan de solidarité monétaire européenne en trois étapes (1971–1974)’ [A plan for European monetary solidarity in three stages (1971–1977)] published on 27 January 1970. This plan, better known as the Snoy Plan, or indeed the Belgian Plan, placed the emphasis on the establishment, during the final stage, of two institutions, a common monetary system and a sui generis economic government in charge of budgetary and income policy. (Document consulted on 10 October 2012.)
97 See Political consultations with the Minister for Foreign Affairs of the Federal Republic of Germany and the Federal Chancellor in Bonn on 14 October 1970, No PN/rh, Ministry of Foreign Affairs and External Trade. Private Office of the Minister for Foreign Affairs, Brussels, 16 October 1970. Diplomatic Archives of the Ministry of Foreign Affairs of Belgium.
98 Ibid., p. 9.
100 ‘The meeting, which my colleagues Snoy, Schiller and Moeller were especially keen to have, was first postponed and then cancelled when I learned that Giscard d’Estaing, who had been very helpful to me in my work, would not be able to attend in person. Meanwhile the Commission had decided to consider the question. We felt that from then on the proper place for follow-up action on the report was at the level of official relations between the Commission and the Council.’ Werner, Pierre, Itinéraires, Vol. 2, p. 136
101 See section 4.3, ‘Reactions in the Council’.
102 Taking stock of the results of the Council meeting of 24 November 1970, the Belgian diplomats noted that there were wide differences among the Six. Some Member States would only be willing to commit themselves to a preliminary three-year stage. Others would want to define the content of the various stages straight away, with a description of the institutional reforms required in particular. The latter would hope to define the characteristics of an economic and monetary union precisely and take a decision at once on the arrangements for its entry into force.
103 See Belgian approach to economic and monetary union, 24 November 1970. Working document, Ministry of Foreign Affairs, Diplomatic Archives of the Ministry of Foreign Affairs of Belgium, Brussels, p. 4. (Document consulted on 10 October 2012.)
104 On 14 and 15 December 1970, the Foreign Ministers and the Ministers for Economic and Financial Affairs of the Six, assisted by, among others, the chairmen of the specialist committees responsible for economic and monetary policy, met in Council in Brussels to decide on the launching of stage one of economic and monetary union. On the first day, the proceedings were chaired by the German Foreign Minister, Walter Scheel, and on the following day by the Federal Minister for Economic Affairs, Karl Schiller.
105 See subsections 1.2, ‘The origins of Pierre Werner’s monetary thinking in the 1960s’, and 1.3.3, ‘Monetary plans drawn up by Belgium, Germany and Luxembourg (January–February 1970)’.
106 Letter sent on 5 January 1970 by the Prime Minister of the Kingdom of Belgium, Gaston Eyskens, to the Prime Minister of Luxembourg, Pierre Werner. Ref. CZ/B1/D9, Brussels, 5 January 1971. Pierre Werner family archives, ref. PW 048. This is evidently a reply to the letter sent by Pierre Werner on 29 December to his five colleagues on the subject of the future of EMU. (Documents consulted on 10 October 2012.)
107 See Maes, Ivo (National Bank of Belgium) and Verdun, Amy (University of Victoria), ‘Small States and the Creation of EMU: Belgium and the Netherlands, Pace-setters and Gate-keepers’. In Journal of Common Market Studies, 2005, Volume 43, Number 2, pp. 327–48
108 The Italian members of the Werner Committee were Gaetano Stammati, Chairman of the Budgetary Policy Committee, and his deputy Simone Palumbo. Guido Carli, Governor of the Banca d’Italia, Finance Minister Emilio Colombo and Rinaldo Ossola, chairman of the Group of Ten, were to help move the work of the experts’ group forward by making substantial contributions to the discussions. The Secretary of the Werner Committee, who at the same time was the Director-General for Economic and Financial Affairs of the European Commission, Ugo Mosca, was also an Italian national. See section 2, ‘The establishment of the Werner Committee and an account of its work (March–October 1970)’.
109 Since the Hague Summit of 1–2 December 1969, the Italian Government had adopted a somewhat ambiguous position on the plan for the establishment of economic and monetary union by stages. While the Werner Committee was doing its work, the Italian Government insisted that the final objective to be attained must be clearly defined, but that it should take account of the political and economic implications of the situation in each country. With a view to this, it stressed the need to take Italy’s particular regional and structural aspects into consideration and to moderate some of the effects which the establishment of EMU might have accordingly. It advocated the notion of ‘close parallel movement’ on monetary cooperation and economic cooperation, emphasising one or other of the principles by turn, ‘depending on the people it was speaking to rather than on its own concerns, which would have led it to press for monetary cooperation in the first instance’, as certain documents from the French diplomatic archives stress. On the institutional question, Rome was gradually won over to the German position, which was to insist, in principle, on the need for a transfer of powers from the national to the Community level and for institutional changes, albeit without defining, any more than the Federal German Government did, the precise field where these adjustments should be made. In that area, the Italians highlighted the vital need for efficient management, and then placed increasing emphasis on the political implications of economic and monetary union, the crucible of a political Europe which would be federal in nature. On this, see ‘Voyage à Paris de M. Colombo’ [Visit to Paris by Mr Colombo], Diplomatic Note of 25 January 1971, Ministry of Foreign and European Affairs of the French Republic, EC Collection, Directorate for Economic and Financial Affairs, Economic Cooperation Department, PM series, Vol. 973, EMU/Basic Documents section, file PM 19.3. French Diplomatic Archives, La Courneuve. See also Questions concerning the establishment by stages of economic and monetary union in the Community, Docs R/2106/70 (End 427), R/2247/70 (End 2242/70) (ASS 1386), European Communities, Council, Note R/230/71 (End 48), Brussels, 05.02.1971. Historical Archives of the Council of the EC
110 This principle was formulated by the Italian Finance Minister, Emilio Colombo, at the meeting of Finance Ministers held in Rome on 29 and 30 May, which led to the Werner Group being instructed to continue its work in greater detail.
111 Joint proposal by Italian Finance Minister Emilio Colombo and the Governor of the Nederlandse Bank, Jelle Zijlstra, formulated in Venice on 30 May 1970.
112 See Maes, Ivo; Quaglia, Lucia, ‘The Process of European Monetary Integration: a Comparison of the Belgian and Italian Approaches’. In National Bank of Belgium, Working Papers — Research Series No 40, Brussels, August 2003.
113 See subsection 4.2, ‘Reactions in the European Commission’.
114 See Summary report of the 44th sitting of the Committee of Governors of the Central Banks, Basel, 8 November 1970, ECB. The Italian representatives on the Committee of Governors who spoke on this matter were Paolo Baffi, representing Guido Carli, Governor of the Banca d’Italia, and Rinaldo Ossola. (Document consulted on 10 October 2012.)
115 See ‘Sitzung der Zentralgouverneure der EWG in Basel am 8.November 1970’ [Sitting of the Committee of Governors of the Central Banks of the EEC in Basel, 8 November 1970]. Dr Otmar Emminger, Vice-President of the German Bundesbank to State Secretary Dr Johannes B. Schöllhorn, Federal Ministry of Economic Affairs, Frankfurt-am-Main, 9 November 1970. Copy from the Federal Archives, Koblenz
116 Note on Minister Schiller’s conversation today with Italian Ambassador Luciolli, Bonn, 24 February 1971. Subdvision EA. Copy from the Federal Archives, Koblenz. BArch B 102 (Bundesministerium für Wirtschaft) / 293320
117 At the Council meeting of 14 and 15 December 1970, the Italian Finance Minister, Mario Ferrari-Agradi, insisted on ‘a specific political commitment which economic and monetary union demands’. ‘The Community must acquire its own decision-making powers and only with an eye to achieving a specific final objective can there be any point to the measures laid down for stage one.’ He also called for ‘adjustments to the institutions’ and said that in his view the Community should go ‘beyond the unanimity principle’ and ‘introduce increasingly binding consultations’. Together with his German and Dutch colleagues, the Italian minister came out in favour of the Commission’s proposal that by 1 May 1973 it should submit draft measures leading gradually to the full establishment of the union, including, as regards those measures which could only be implemented within the framework of the provisions in the Treaty, draft amendments to be made to the Treaty. He also supported the idea of parliamentary control on the lines of that exercised by the national parliaments. As regards the deadline for setting up economic and monetary union, he subscribed to the French formula whereby the Community and the governments would do ‘all in their power’ to establish EMU within the coming ten years. See ‘Le résultat des délibérations de la nuit dernière’ [The outcome of last night’s talks], Agence Europe, Daily Bulletin No 707 (new series). Brussels, 15 December 1970.
118 Questions concerning the establishment by stages of economic and monetary union in the Community, Docs R/2106/70 (End 427), R/2247/70 (End 2242/70) (ASS 1386). European Communities, Council, Note R/230/71 (End 48), Brussels, 05.02.1971. Historical Archives of the Council of the EC.
119 The Dutch authorities were strongly opposed to the ‘guillotine compromise’ drawn up jointly by the French and the Germans and seen as not very satisfactory, but they agreed to it ‘not just because there was no alternative’ but also because they thought that ‘the decisions cannot go on being put off forever’. Cf. Message ref. J.M.A.H. Luns to the Ministry of Foreign Affairs of the Netherlands, 12 February 1971, NA, 2.05.313, Foreign Affairs, block 3, 1965–1974 (National Archives, Repository in The Hague, inv. No 19482). The term ‘guillotine compromise’ (also known as ‘escape clause’ or ‘safeguard clause’), formulated by Karl Schiller, meant that the monetary measures in stage one (reduction in the margin for exchange-rate fluctuations, a mechanism for mutual financial assistance and the prospect of a monetary cooperation fund) would be annulled if no agreement on the transition to stage two were reached within five years. Because of the historical circumstances, this clause, which had sparked off so much discussion, was never put into practice, in particular because of the international monetary upheavals which began in 1971. See 61 above.
120 This resolution, which was adopted by the Council and the representatives of the Member States’ governments on 22 March 1971, marked the official launching of stage one of economic and monetary union. Citing in its preamble the political determination of the Six to commit themselves to the building of an economic and monetary union by the implementation of a plan by stages, the resolution referred paradoxically to the Werner Committee’s interim report rather than the final report, of which the broad outlines specify the content of stage one of EMU, while sketching out the outline and the main features so that such an edifice could take shape within the space of a decade. (Document consulted on 10 October 2012.)
122 Statement by Karl Schiller on the realisation of an economic and monetary union, Bonn, 10 February 1971. In ‘The European Community: from the summit conference in The Hague to the Europe of Ten’, Bonn, Press and Information Office of the Government of the Federal Republic of Germany. (Document consulted on 10 October 2012.)
123 An interesting point is that on the initiative of Karl Schiller, Germany called for firm European coordination of national budgetary policies, thus foreshadowing the emergence of a political authority alongside the future central bank. France, which did not want any commitment to practical steps to make economic and financial policy a Community matter or harmonise it, opposed the move. It was decided to defer the decision and the discussion came to a halt.
124 The Pierre Werner family archives show that at the instigation of Baron Ansiaux, Chairman of the Committee of Governors of the Central Banks, supported by Pierre Werner in the chair and with solid backing from the Benelux, the strengthening of monetary solidarity and the consequences of possible participation by the United Kingdom in the monetary cooperation mechanisms were subjected to detailed scrutiny. The same applied to the impact of the pound sterling on the European Reserve Fund. See sections 2, ‘The establishment of the Werner Committee and an account of its work (March–October 1970)’, and 4.2, ‘Reaction in the European Parliament’. Note that British opinion, particularly in academic circles, think tanks and banking circles, kept abreast of progress in the work of the Werner Group and the thinking around the plan by stages.
125 UK accession is not within the scope of the analysis of this digital research corpus on the Werner Report.
126 The interim Werner Report, which was published on 20 May 1970, sketched out the strategic objectives of an economic and monetary union to be achieved within a decade. Ideally, the building of this structure would be finalised by the adoption of a single currency as a guarantee that the process was irreversible. It is worth noting that, in view of the imminence of UK accession, the ad hoc group gave this matter its attention as soon as its discussions started. (Document consulted on 10 October 2012.)
127 Sir Edward Richard George Heath (1916–2005), British politician, member of the Conservative Party, of which he was leader (1965–1975). He was Prime Minister of the United Kingdom from 1970 to 1974 and during his term the United Kingdom joined the EEC (becoming a member on 1 January 1973).
128 See the speech by Edward Heath, Prime Minister of the United Kingdom, to the House of Commons on 21 July 1971 describing the course of the negotiations under way in Brussels on the country’s accession to the European Economic Community (EEC) and the issues at stake. (Document consulted on 10 October 2012.)
129 From November 1967 to June 1970, under the government of Harold Wilson, the UK Treasury was headed by Roy Jenkins (1920–2003), a prominent member of the Labour |Party. This supporter of the European cause later became President of the Commission (1967–1970).
130 The UK’s contribution to progress on European monetary union was one of the main items on the agenda for the talks which Valéry Giscard d’Estaing (on 24 November 1970) and Karl Schiller (on 25 November 1970) had with the British Chancellor, Roy Jenkins, in London. Cf. German diplomatic cable from the FRG Embassy in London, No 886747b bmwi d, Bonn No 4239 of 27 November 1970. Copy from the Federal Archives, Koblenz.
132 The ‘Memorandum on the coordination of economic policies and monetary cooperation within the Community’, a paper drawn up by the Commission of the EC, better known as the ‘first Barre Memorandum’ or ‘first Barre Plan’, was published on 12 February 1969. The aim of the proposals in it was the coordination of economic policies and monetary cooperation at the Community level. (Document consulted on 10 October 2012.)
133 ‘Statement by Mr Heath on the trade and monetary policy of the EEC’. Note from the Ambassador of France in Great Britain to His Excellency Mr Maurice Schumann, Minister for Foreign Affairs, Ministry of Foreign and European Affairs of the French Republic, London, 30 March 1972. EC Collection, Directorate for Economic and Financial Affairs, Economic Cooperation Department, PM series, Vol. 972, EMU/Bilateral Relations Section/The United Kingdom, file PM 19.3. French Diplomatic Archives, La Courneuve.
134 The Werner Report made provision for a decision-making centre for economic policy, answerable to the European Parliament, and a System of Central Banks, organised on the lines of the American Federal Reserve System and responsible for running the common monetary policy (liquidity, interest rates, exchange rates, etc.).
135 See section 2.2, ‘The work of the Werner Committee’.
136 See Grygowski, Dimitri, Les États-Unis et l’unification monétaire européenne, Éditions PIE Peter Lang, Brussels, 2009, pp. 215–131. See also section 5, ‘The implementation of the Werner Report’.
137 Ibid., p. 120
138 See the article ‘Common Market agrees on Monetary Union designed to give Europe a single currency’, in the Wall Street Journal, 6 June 1971.
139 ‘Europe’s defense against America’s deficit’, in the Wall Street Journal, 29 July 1971.