From the EMS to the EMU and…To China

45 Pages Posted: 8 Nov 2019 Last revised: 14 Aug 2020

See all articles by Joseph Halevi

Joseph Halevi

The University of Sydney - Department of Political Economy; International University College (IUC) of Turin

Date Written: September 1, 2019


This essay deals with the EMS experience and its failure, with the Maastricht Treaty, and with the interregnum leading to the formation of the EMU in 1999. The paper highlights the position of German authorities, showing that they were quite lucid about the fundamental weaknesses inherent in a process that separated monetary from fiscal policies by giving priority to the centralization of the former. Instead of repeating the well known critiques leveled against the EMU – for which readers are referred to the unsurpassed treatment by Stiglitz, the essay highlights the splintering of Europe in the way in which it has unfolded during the 1990s and in the first decade of the present millennium. In particular the early economic and political origins of the terminal crisis of Italy are located between the late 1980s and the 1990s. France is shown to belong increasingly to the so-called European periphery by virtue of a weakening industrial structure and persistent balance of payments deficits. The paper argues that France regains its central role by political means and through its weight as an active nuclear military power centered on maintaining its imperial interests and posture especially in Africa. The first decade of the present millennium is portrayed as the period in which a distinct German economic area had been formed in the midst of Europe with a strong drive to the east with an increasingly powerful gravitational pull towards the People’s Republic of China.

Keywords: European Monetary System, Common Market, France, Germany, Italy, Netherlands, currency depreciation, European Monetary Union

JEL Classification: E02, F02, F5, N14, N24

Suggested Citation

Halevi, Joseph, From the EMS to the EMU and…To China (September 1, 2019). Institute for New Economic Thinking Working Paper Series No. 102 , Available at SSRN:

Joseph Halevi (Contact Author)

The University of Sydney - Department of Political Economy ( email )

Merewether Building (H04)
Sydney, 2006

International University College (IUC) of Turin ( email )

Piazza Carlo Felice, 18
Torino, 10121

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