Introduction

The inter-governmental conference (IGC) on economic and monetary union (EMU) which started in Rome in December 1990 and was concluded in Maastricht one year later had two main tasks. The first was to define, as precisely as possible, how collective authority over economic policy will be exercised in the final stage of EMU. This entailed setting out the legal and institutional framework for full monetary union and taking the necessary steps for the implementation of the non-monetary policies which will accompany the irrevocable locking of parities among the participating currencies and the subsequent introduction of a single currency. Preparations for the IGC, notably the draft statute proposed by the committee of EC central bank governors in November 1990, and early work in the IGC on EMU focused on this task. The institutional design which has emerged is the main achievement of the past year's negotiations. It has revealed a degree of support, which could not have been expected when the EMU debate started, among the policy-makers in the Community for entrusting joint monetary policy to a central banking institution which is (i) committed to the primary objective of price stability, and (ii) remarkably independent, through a number of safeguards, from short-term political pressures.