What role did the Werner Plan play in the development of the European Economic and Monetary Union (EMU) from a German perspective?

1. Introduction

The period from the mid-1960s to the end of the 1970s is often characterized in the history of European integration as a phase of stagnation. A long-term perspective, however, reveals the significance of the concepts developed in those years for European unification. Particularly noteworthy in this regard are the summit meetings in The Hague (1969) and Paris (1972), both of which can be seen as "milestones" carrying fundamental "integration trends." A number of questions therefore arise in what follows, such as: What was the historical context? On which goals was agreement reached, and for what reasons? What effects did these have on the Community's integration dynamic? (cf. Knipping 2004, p. 3 f.)

This is what will be examined below, since intensified European cooperation is not merely the result of external factors but is, above all — as the monetary question in particular shows — decisively shaped by German-French dialogue and bilateral compromise. The historical events of that period will first be traced and then analyzed chronologically in more detail, in order to clarify, from a German perspective, what role the Werner Plan played in the development of European Economic and Monetary Union.

This is a well-documented and thoroughly researched field, which means a large body of primary literature can be drawn upon in the form of Council decisions, speeches, statements, and newspaper articles. In addition, substantial secondary literature is available, such as that of Hans Tietmeyer. He previously headed the European Department for Monetary Affairs at the Federal Ministry of Economics and also served as deputy to State Secretary Schöllhorn in the working group on the Werner Plan. The works of many other scholars, such as Gerhard Brunn, Joachim Schuster, and Claus Thomasberger, are likewise drawn upon in this study.

The research debate on this topic is shaped by two fundamental positions:
The scholar Andreas Wilkens regards the Werner Plan as an essential milestone on the path to EMU. In his view, the experience gathered during that period had a lasting influence on the Community's further monetary integration.

Claus Thomasberg, by contrast, sees the further developments toward EMU as independent of the Werner Plan. For example, in his view the founding of the European Monetary System was the result of changed market conditions rather than a continuation of the integration perspective of the Werner Report.

Both positions will be examined in more detail in due course, for looking back, the Scientific Advisory Board of the Federal Ministry of Economics had already stated in 1953: "a characteristic feature of a European internal market is a common currency" (cf. Deutsche Bundesbank 1969). The Treaties of Rome of 1957, however, initially paid little attention to monetary integration. Only the determination of exchange rates receives indirect mention in Article 107, as a "matter of common interest" (cf. Schuster 1994, p. 72 f.).

The reason for this lay in the still smoothly functioning Bretton Woods system, a key-currency system tied to the US dollar, which made a separate European monetary and currency policy unnecessary. Only after uncertainties arose within the world monetary system during the 1960s did monetary union become a significant integration project of the European Community (cf. Brunn 2002, p. 214 f.).

The first concrete efforts were undertaken in 1961, following a revaluation of the Deutsche Mark and the Dutch guilder that took the other EEC states by surprise. The need for stronger intra-European coordination became apparent. The European Commission reacted very promptly and announced an action program in 1962 for improved cooperation on monetary matters. Among other things, this envisaged the establishment of three new committees, which, however, had only the character of non-binding consultative, informational, and advisory bodies. Accordingly, the initiative had no major effect (cf. Thomasberg 1993, p. 157).

The steadily rising US budget deficits from the 1960s onward, above all as a result of the Vietnam War, led to inflation and, through the mechanism of fixed exchange rates in Europe, to an involuntary co-financing of American foreign and security policy (cf. Brunn 2002, p. 214 f.). The quantities of dollars accumulated abroad far exceeded American gold reserves.

Against this backdrop, confidence in the dollar was lost, and doubts about the guarantee of gold convertibility grew ever stronger. The result was a run on American gold reserves along with an accompanying wave of speculation against the dollar. The United States responded by renouncing its convertibility obligation, intending to maintain the gold standard only vis-à-vis central banks (cf. Thomasberg 1993, p. 106-111).

The economies of Western Europe were considerably disrupted as a result. The undesirable monetary dependence on the United States as the key-currency country became increasingly apparent. The framework of fixed prices, so important for the Common Agricultural Policy (CAP), was seriously disturbed (cf. Tietmeyer 1992, p. 246).

When Georges Pompidou succeeded the resigned Charles de Gaulle in April 1969, he proposed, at an initial press conference, a summit meeting on the completion, deepening, and enlargement of the Community (cf. ibid., p. 177).

With this, the Community was to make, in 1969, a second attempt at deepening monetary integration (cf. Schuster 1994, p. 72 f.). The initiative toward "deepening" is to be seen not only against the backdrop of the problems in the price structure of the common agricultural market. Under the EEC Treaty, the Community also entered its final phase in 1970. The customs union had been completed ahead of schedule. In order not to jeopardize the momentum of the integration process, it seemed necessary to define new goals (cf. Krägenau; Wetter 1993, p. 8 f.).

At the summit in The Hague, the heads of state and government reaffirmed in December 1969 their intention to resolutely continue the work begun in Rome (cf. Brunn 2002, p. 181). Among other things, they announced the plan to expand the European Economic Community into an Economic and Monetary Union (cf. Magnifico 1977, p. 217). In March 1970, the Council then decided to set up a working group chaired by the Luxembourg Prime Minister and Finance Minister Pierre Werner (cf. Thomasberg 1993, p. 160).

Both the plans of individual governments and those of the Commission had made clear that there were considerable differences of opinion regarding the design of the phased plan. The differing views on the ultimate goal of a monetary community collided within the Werner Committee. The "economist" approach, represented by the Federal Republic, saw excessive risks in a rapid monetary commitment given the major structural differences involved. Opposed to this stood the "monetarist" position of France, which aimed, through an early monetary commitment, to trigger a compulsion toward structural convergence (cf. o.V. 1971, p. 123 f.).

After five sessions with at times heated discussions within the committee, an interim report could be presented to the government representatives in Venice at the end of May 1970 (cf. Hiepel 2012, p. 97). The considerable differences of opinion over the integration concept nonetheless persisted, as became clear not least in the discussions on the draft Council resolution of 29 October 1970 (cf. Krägenau; Wetter 1993, p. 8).

In its final version, the "Report to the Council and the Commission on the realization by stages of Economic and Monetary Union in the Community" was presented in October 1970 (cf. Thomasberg 1993, p. 160). The EMU envisaged therein was to secure "growth and stability in the Community," contribute to "the economic and monetary equilibrium of the world," and turn "the Community into a pole of stability." In the Werner Report, the expert group advocated achieving EMU "during the course of this decade" (cf. Brunn 2002, p. 216).

The idea of a unified economic and monetary area was to be prepared step by step through a merging of national economic, budgetary, and monetary policy, along with their increasingly strong steering through the establishment of Community institutions. The proposed measures aimed to advance both monetary and economic policy in parallel, thereby overcoming the discrepancy between the "crowning theory" (economists) and the "locomotive" (monetarists). The core question of the necessary institutional development, and of the corresponding supplementation or amendment of the treaties, nevertheless remained unresolved and, for the time being, open, beyond very general formulas. (cf. Thomasberg 1993, p. 160)

After publication of the Werner Report, considerable headwind was noticeable. Whereas Willy Brandt saw the implementation of the proposals made as the most far-reaching decisions since the signing of the Treaties of Rome, France firmly rejected the transfer of national sovereign rights to the Community level (cf. Hiepel 2012, p. 104 ff.).

Both countries stood at the center of the dispute, and an agreement could only be reached through substantial concessions on the economist side, during the German-French summit meeting of 25 and 26 January 1971 (cf. ibid., p. 113).

In March 1971, the Council of Ministers then set the presented plan in motion with corresponding adjustments. That resolution included a list of measures to be implemented within the first stage, starting in July 1971 (cf. o.V. 1972, p. 142 ff.).

Although all memoranda and statements following The Hague had called for monetary union to be underpinned by an economic union, and although Political Union was likewise regarded in the Werner Report as indispensable in connection with EMU, this principle no longer appeared in the resolutions (cf. Krägenau; Wetter 1993, p. 8).

Meanwhile, however, the future took a different course, one whose developments the Council decisions would not withstand. As a result of a currency crisis in spring 1971, the EEC states could not agree on joint countermeasures. Doubts arose about the prospects of realizing EMU. Stability preferences, economic conditions, and structural differences seemed too disparate to be overcome in the short term (cf. o.V. 1972, p. 143).

This was not altogether surprising, since the Werner Group's final report had already pointed out that "clear differences still exist between the member states with regard to achieving the growth and stability objective," and that "without effective harmonization of economic policy, the danger of the emergence of imbalances remains."

Some countries, including the Federal Republic of Germany, temporarily abandoned the fixed link to the dollar and allowed their currencies to float freely. Only after a currency conference convened by the United States in December 1971 did these countries return to fixed exchange rates against the dollar (cf. Magnifico 1977, p. 242 f.). In the so-called "Smithsonian Agreement," new exchange-rate parities were fixed and the permissible fluctuation margin was widened to +/- 2.25%. This meant that the fluctuation margins between two European currencies were extended to 4.5% against each other. This, however, contradicted all initiatives aimed at developing narrower fluctuation margins as part of moving toward the goals of EMU, and once again threatened to knock the common agricultural market off its hinges (cf. Thomasberg 1993, p. 164).

A further attempt was accordingly made, taking the new starting position into account, with the Council resolution of 6/7 March 1972 (cf. o.V. 1972, p. 145). Agreement was reached on a zone of even greater currency stability. The objective was to halve the permissible fluctuation margins relative to the dollar.

The Basel Agreement, adopted in April 1972, created a European exchange-rate arrangement which — as proposed by the Werner Group — provided for coordinated intervention behavior (cf. Brunn 2002, p. 217 f.). Under their membership, the central banks were now obliged to stabilize weak currencies through support purchases (cf. Magnifico 1977, p. 220).

The exchange-rate arrangement experienced a checkered existence over the following months and years. Currencies — even those outside the EEC — joined the "snake" and, as a result of renewed currency speculation and the oil price crisis, ultimately had to leave it again (cf. Thomasberg 1993, p. 164). Problems began to pile up, and it seemed as though the Community were dragging itself from one crisis to the next (cf. Brunn 2002, p. 220). New attempts, aimed at a European Economic Community on equal monetary footing with the United States, would therefore not succeed again until 1979 (cf. ibid., p. 246).

2. Main Part

The German stance on economic and monetary questions is undoubtedly linked to Ludwig Erhard and his policy of internal price stability. For him, currency stability was the "supreme commandment" and even deserved to be counted among "fundamental human rights." Erhard's liberal views therefore also had a decisive influence on the shaping of the European Economic Community (EEC).
Moreover, within the Federal Republic of Germany, drawing on the experience of past hyperinflation, there was heightened sensitivity to inflationary risks. People felt confirmed by the new, positive experience that a central bank can pursue its stability mandate more successfully only if it is not influenced by politics. Thus the Deutsche Bundesbank is "independent of instructions from the Federal Government in the exercise of its powers (…)" (§12, BBankG, cf. Tietmeyer 1996, p. 49-57).

2.1 The Bretton Woods System

The existence of a key-currency system encompassing the entire Western world made special European initiatives to stabilize currency relations unnecessary. The customs union was able to develop very dynamically precisely because the global monetary system represented a stable framework that kept disruptive influences at bay (cf. Thomasberg 1993, p. 156).

2.2 Commission Memorandum (Barre Plan)

The proposal for closer European monetary cooperation was already contained in the "Barre Plan" of February 1969. This advocated the "activation and reinforcement of the (…) hitherto scarcely used provisions of the EEC Treaty on monetary policy cooperation." Chancellor Kiesinger reacted positively to the proposal, and the EC Council also approved the plan in July 1969. Strengthened monetary cooperation was therefore already on the agenda before the summit in The Hague (cf. Wilkens 2004, p. 219 ff.).

The question of future monetary cooperation, however, only became pressing once the French currency lost considerable stability in autumn 1968. After the change of government in August 1969, the franc had to be significantly devalued, while the Deutsche Mark, by contrast, was significantly revalued two months later. This necessary measure made clear the unsatisfactory state of the international monetary order. The creation of a European currency area thereby became more difficult, yet at the same time its realization became all the more urgent (cf. Magnifico 1977, p. 217).

The first deliberations in the Council of Ministers on the memorandum, however, revealed considerable skepticism on the German side toward monetary support measures. "The European currency must remain a mirage as long as the coordination of economic policy has not been largely achieved," stated a Bundesbank press release of 17 September 1969. German monetary guardians saw "considerable risks, particularly for price-level stability," and believed that "the economic and monetary policy resulting from majority decisions would certainly scarcely correspond to our previous stability requirements." There was concern that the currency imbalance within the common market would lead to imported inflation (cf. Deutsche Bundesbank 1969).

2.3 The Hague Summit

The danger that currency turbulence posed to the openness of the goods market, however, grew ever more threatening, which spurred on harmonization efforts. The German phased plan of October 1969 likewise considered further development of the Community "urgently necessary." EMU was seen as a precondition for making "full use of Europe's economic strength, for the realization of political integration, and for strengthening Europe's economic and political position" (cf. Thomasberg 1993, p. 159).
Chancellor Brandt welcomed the "bold yet realistic plan" and assessed it as "a good starting point," while at the same time recalling that appropriate parallelism between economic and monetary policy integration had to be ensured (cf. Hiepel 2012, p. 96).

Within the Community, the idea arose of linking the Deutsche Mark with the weaker currencies. In this context, however, there was suspicion on the German side that France wanted to make use of monetary advantages without, in return, fulfilling economic-policy obligations (cf. Wilkens 2004, p. 229). Indeed, at that time France was primarily concerned with completing the agricultural market, whose finances had been thrown into disarray by the currency turmoil of 1968/69 (cf. Brunn 2002, p. 183 ff.). Yet although the initiative met with resistance from the Federal Republic, Willy Brandt gave in to French pressure for political reasons.

He proposed to the six heads of state and government in The Hague the establishment of an "Economic and Monetary Union" to eliminate exchange-rate fluctuations (cf. ibid. 2002, p. 215). At the summit meeting on 1 and 2 December 1969, however, the Chancellor also made the German position clear, pointing to the need "to develop a common economic policy," which above all required "convergent behavior" (cf. Brandt 1969).

Under point 8, the EEC states subsequently decided to work out a phased plan for the realization of EMU, the sequence of which was to correspond to the German proposal (cf. Wilkens 2004, p. 226). For this purpose, a commission of experts was set up under the chairmanship of the Luxembourg Prime Minister and Finance Minister Pierre Werner. In Germany, however, there was little enthusiasm about Werner's appointment, since he had previously criticized the demands made by the Federal Republic. The impression arose that a counterweight to the German position was meant to be created (cf. Hiepel 2012, p. 96 f.).

The resolutions reached at the summit in The Hague did not, admittedly, meet the high expectations of the time, but they are nonetheless regarded, especially with respect to EMU, as groundbreaking (cf. Brunn 2002, p. 183 ff.). The Federation of German Industry (BDI) accordingly praised the conference as an "outstanding event in integration policy" that had "ended the multi-year phase of stagnation."

2.4 Negotiations and the Werner Group's Interim Report

The first talks of the Werner Group, set up to examine the final stage of EMU, were shaped above all by representatives of the economist approach — including Federal Minister of Economics Karl Schiller. Giscard d'Estaing, as an advocate of the monetarist position, on the other hand, did not consider it urgent to define the details of institutions that would only become relevant after ten years (cf. Wilkens 2004, p. 232).

In an interim report of the Werner Committee, presented at the meeting of finance ministers and central bank governors on 29 and 30 May 1970 in Venice, it was stated that "the most important economic-policy decisions must be taken at Community level, and the necessary competences must therefore be transferred from the national level to that of the Community." The Italian Prime Minister Mariano Rumor, however, spoke out against too explicit a commitment, which could lead to the failure of the entire plan. He pointed out that France would not endorse an EMU with such far-reaching institutional consequences, and thereby helped ensure that the committee was able to resolve the still-contested questions over six further sessions, up to October 1970 (cf. Hiepel 2012, p. 102).

The final report was adopted unanimously by the Werner Committee. Despite differing starting positions, it had been possible to find "an acceptable compromise between (…) economic-policy and European objectives" (Short report on the 11th session of the "Werner Group" on 7/8 October 1970 in Luxembourg, BAK B102, 93463). This, however, bore "strongly economist features," as Rolf Hasse put it in his analysis (cf. Krägenau; Wetter 1993, p. 125).

2.5 The Werner Plan

In the Werner Report presented, agreement was reached on a parallel advance of the measures, which subsequently shaped the German-side concept of "effective parallelism." This meant that, in principle, economic harmonization had to take place before monetary integration, owing to the delayed effects of individual measures (cf. Hiepel 2012, p. 102). In defining the individual stages, however, the approach was less detailed. The working group could not bring itself to make clear statements (cf. Thomasberg 1993, p. 161).

After the completed Werner Report was submitted, reactions on the German side were consistently positive. The Federal Ministry of Economics concluded that the Federal Government could "endorse the Werner Report in full." The result largely corresponded "to German economic- and European-policy objectives" (Memorandum, 27 October 1970, E 1/IA1-030000/10). Although the Federal Republic ultimately prevailed on many contested points, Schiller himself commented on the results rather soberly. He said that, "in the interest of European policy," they had "gone to the very limits of what was defensible in economic- and stability-policy terms" (cf. Schiller to Brandt, 14 October 1970, BAK B102, 93463).

The Foreign Office, by contrast, praised the report as a "realistic, balanced concept" which, even if not down to the last detail, gave the EEC new impetus toward a political community (cf. Circular of Senior Legation Counsellor First Class von Bismarck-Osten, 30 October 1970, AAPD1970, Doc. 503).

Chancellor Brandt wanted to make use of the positive mood after the summit in The Hague for his European policy, and aimed to implement the Werner Plan while Germany still held the Council Presidency, that is, by the end of 1970. This wish, however, could ultimately not be realized. The Council of Ministers meeting on 14 December 1970 ended without result owing to French resistance (cf. Hiepel 2012, p. 106 ff.).

In France's view, following the presentation of the interim report the Werner Report had developed a momentum of its own that should never have been allowed to occur: "We cannot accept the Werner Plan as a whole." (cf. Notes by Bernard for Pompidou, 2 November 1970, CHAN 5AG2, 58). Pompidou shared this view and perceived the Werner Report as a provocation, above all with regard to the German elements it contained, which were aimed at political union. He wanted to remove the pace of reform from monetary and economic policy development, which contradicted the German concept of rapid progress in the integration process (cf. Hiepel 2012, p. 112).

2.6 Adoption of the Phased Plan

It now fell to the European Commission to carry out the difficult task of developing recommendations for the adoption of the phased plan for the realization of EMU on the basis of the Werner Plan. These proposals, however, were ultimately considerably watered down, which can be interpreted as an attempt to accommodate France. This approach met with unanimous criticism on the German side. Schiller stated in the German Bundestag that the Werner Plan must under no circumstances be "diluted" (cf. Wilkens 2004, p. 237).

The Council negotiations on 14 December 1970 in Brussels accordingly proved difficult. France abstained from any statement (cf. ibid., p. 240). No progress was made even after eleven hours of deliberation. The supranational integration concept increasingly lost its luster, and the BDI gained the impression that "national interests were once again gaining the upper hand, and that progress in integration could only be achieved at the lowest common Community denominator" (cf. BDI, in: Tietmeyer 1992, p. 444).

2.7 German-French Summit Consultations

Agreement was reached only at the German-French summit meeting of 25 and 26 January 1971. Chancellor Brandt sought from Pompidou a "political declaration of intent" that an agreement on further political action would have to be reached before the end of the first stage. The French President had no objection to this flexible formula and was therefore prepared to agree to a safeguard clause. This reservation was to be timed so that it would remain valid only for a short period beyond the first stage of EMU. On the German side, it was hoped that this would create a "salutary pressure" to achieve parallel progress toward the second stage. Were this not possible, the consequence would be the suspension of the monetary agreements (cf. Wilkens 2004, p. 242 f.).

With the negotiated compromise, the Council of Ministers was able to decide, on 9 February 1971, to create the European Economic and Monetary Union in stages. The first stage was to take effect on 1 July 1971. The decision made clear that the first stage "must not be regarded as an end in itself," but is "inseparably linked to the overall process of economic and monetary integration." "It must therefore be undertaken with the determination to achieve the final goal." (cf. Decision of the EC Council of Ministers of 8/9 February 1971 on the realization of Economic and Monetary Union).

As an integration project with political ambition, EMU was no longer conceived in this way, and efforts were limited to monetary cooperation and economic coordination within the Community. Pompidou had thereby achieved his goal. The intended monetary union had been set in motion without far-reaching institutional or political demands being attached to it.

Willy Brandt sacrificed the economist position and accepted the monetary thrust of the first stage, in the hope of later concessions regarding parallelism. In doing so, he placed national interests behind those of the Community, thereby securing the further progress of integration efforts (cf. Hiepel 2012, p. 116 f.).

2.8 Collapse of the Bretton Woods System

Only a short time later, currency speculation triggered a further currency crisis. The 20-hour deliberations held on 8 and 9 May 1971 in Brussels on this matter remained without result. The joint, temporary floating of EEC currencies against the dollar proposed by the Federal Republic of Germany once again failed owing to French resistance. The governments in Bonn and The Hague suspended quotations of the mark and the guilder the following day due to massive dollar inflows, whereas other EC countries moved toward stronger controls on money and capital movements (cf. Thomasberg 1993, p. 163).

The Werner Plan, however, assumed fixed exchange rates against the dollar (cf. Reupke 2000, p. 22). The narrowing of the fluctuation margin envisaged for the first stage of EMU thereby became obsolete. A fundamental problem became increasingly apparent: currencies had been linked, but not economic policy. As a result, targeted speculation against weaker currencies occurred on the market (cf. Brunn 2002, p. 219).

As an increasing number of European central banks applied to the Federal Reserve for a guarantee of the value of their dollar holdings, President Nixon reacted on 15 August 1971 — as part of his new economic and monetary program — by suspending gold convertibility. The US dollar as the international key currency thereby de facto no longer had a fixed equivalent value (cf. Emminger 1986, p. 193). Despite the decision at the Washington currency conference to return to a system of fixed exchange rates, many central banks found themselves, a few months later, no longer able to intervene in the market in a stabilizing manner.

Thus, on 1 March 1973 alone, the Bundesbank had to issue nearly eight billion marks anew in order to counter currency speculation. The dollar purchases, however, caused imported inflation, which contradicted German notions of stability. "At that point we pulled the emergency brake. That was the death knell for the Bretton Woods parity system," said the then Bundesbank president Otmar Emminger. The foreign-exchange markets of the Federal Republic and other industrial nations were closed and only reopened, with parities floating freely, more than two weeks later, once "the entire currency wreckage had been cleared up" (cf. Emminger 1986, p. 240 ff.). The end of the Bretton Woods system was commented on by Ludwig Erhard not without a certain satisfaction (cf. Tietmeyer 1996, p. 55).

2.9 The European Exchange-Rate Arrangement

The Basel Agreement followed, which in April 1972 launched the so-called "currency snake" — a measure already mentioned in the Werner Plan, in Section III No. 7. According to this, the central banks were to "hold exchange-rate fluctuations within narrower bands through coordinated action vis-à-vis the dollar."
As the world monetary system increasingly failed to fulfill its role, the central banks of the EEC states established the "European Monetary Cooperation Fund," with the aim of creating a zone of stable exchange rates within the Community. Speculative movements of other Community currencies against the Deutsche Mark nonetheless continued, and the "oil price shock" also put the European exchange-rate arrangement to a hard test (cf. Magnifico 1977, p. 242 ff.). The balance-of-payments structure of many members was thrown into disarray, making exchange-rate adjustments — and thus exit from the currency snake — unavoidable. In the end, as a result, only the currencies of the Federal Republic of Germany, Denmark, and the Benelux states remained within the European exchange-rate arrangement (cf. Thomasberg 1993, p. 164).

It became evident that a system of fixed exchange rates — even one regionally limited — can only function between countries whose economic development is sufficiently homogeneous. Developments therefore proved the economists right (cf. Lahnstein 1978, p. 264). Europe did not yet appear ready for EMU (cf. Federal Ministry of Finance 1996, p. 25).

The discussion on deepening monetary-policy cooperation, however, by no means fell silent. In mid-1978, Schmidt and d'Estaing launched an initiative to create a European Monetary System. These efforts developed considerable momentum, so that as early as December 1978 the details of the future monetary system could be laid down in a decision of the European Council. The EMS was finally brought into being on 13 March 1979 through an agreement between the central banks of the member states (cf. Schuster 1994).

3. Conclusion

According to Harbrecht, an Economic and Monetary Union represents the most far-reaching form of economic integration and is not merely an economic act, but rather a political one (cf. Reupke 2000, p. 15-19). To what extent, then, was the Werner Plan a milestone on the path to today's EMU?

With Pompidou and Brandt, after they took office in 1969, a kind of "new pragmatism" was noticeable within the Community (cf. Wilkens 2004, p. 217). Yet in place of lofty plans for EMU, an often all-too-short-winded economic-policy pragmatism had taken hold within a Community that had become an "association of self-interest" (o.V. 1976). The concessions made to the integration-policy ambitions of the Werner Plan, right up to the end, were unmistakable (cf. Wilkens 2004, p. 243).

In the early 1970s, the Community had not succeeded in moving closer to the goal of more stable exchange rates. The causes for this lay largely in conceptual ambiguities and differences of opinion between the member states, above all between Germany and France (cf. Steinel 1989, p. 4). Loose intergovernmental cooperation, in which decisions remain with national institutions, is not, however, sufficient as a foundation in the long run, as the world economic crisis of 1971 made clear (cf. o.V. 1972, p. 145).

The concept of a European foreign-exchange market stood in contrast to the way the key-currency system functioned. This background also explains why the reduction of trade barriers ("functional integration") was able to progress faster than planned, whereas the development of joint instruments for intervention and policy ("institutional integration") fell by the wayside. (cf. Thomasberg 1993, p. 156)

In retrospect, the debate over the phased plan for realizing Economic and Monetary Union was part of the European learning process. Thus the standstill in European integration policy following the world economic crisis from 1974 onward can also be seen as a period of reflection on which the Community's subsequent efforts were able to build (cf. Reupke 2000, p. 32). In this way, the content and experience of the Werner Plan still find application today, for example in the convergence criteria for introducing the euro laid down in Maastricht in 1992.

It can therefore be concluded that more was required than political will alone to create a common currency within a decade, across an area with two differing economic structures. Further monetary integration in the Community was therefore also to proceed, in the decades that followed, "in irregular bursts, with abrupt setbacks and new accelerations" (cf. Wilkens 2004, p. 243).

Sources

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