Europe 1957 to 1979: From the Common Market to the European Monetary System

Joseph Halevi ()
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Joseph Halevi: International University College of Turin

No 101, Working Papers Series from Institute for New Economic Thinking

Abstract: This essay deals with the contradictory dynamics that engulfed Europe from 1959 to 1979, the year of the launching of the European Monetary System. It focuses on how the macroeconomic framework of stop-go policies in the 1960s ended up privileging external \'96 intra-European - exports at the expense of domestic demand. The paper offers a very tentative explanation as to why stop-go policies, by weakening domestic demand, did not put an end to the to the \'91long boom\'92 earlier as they should have. The French crisis of 1968-69 leading to the demise of De Gaulle is discussed at length, as is the renewal of the German export drive in the wake of a nominal revaluation of the D-Mark in 1969. Finally, the revival of labor struggles in Italy in the same year is put in the context of the structural weaknesses of the Italian economy as analyzed by the late Marcello de Cecco. The conclusion is that European countries had neither the political culture nor the institutional mechanisms to coordinate mutually advantageous policies. Their so-called cooperation was an exercise in establishing hegemony while defending the interests specific to the dominant economic groups of each country. The essay then deals with the formation of the EMS as an expression of efforts to establish and enforce economic dominance.

Keywords: European Monetary System; Common Market; France; Germany; Italy; Netherlands; currency depreciation; European Monetary Union (search for similar items in EconPapers)
JEL-codes: E02 F02 F5 N14 N24 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2019-06
New Economics Papers: this item is included in nep-his and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:101

DOI: 10.36687/inetwp101

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