Only One Bed for Two Dreams.
How Italy Joined the
European Monetary System
Dienstag, 20. März 2018
Die Initiatoren laden herzlich zu dieser Veranstaltung ein. Der Eintritt ist frei.
This talk is a draft of a more comprehensive research on the political and economic history of Italy’s joining the European monetary integration, in which I will deal the general issues laid out here.
The complete outline includes: the development of official and unofficial Italian attitude over the European monetary cooperation; Italian economic diplomacy after the fall of the Snake; the internal dispute on the opportunity to joint the European Monetary System and the political decision to joint it; the EMS fall in the early 1990s, when in the aftermath of a failed attempt at international currency coordination first in the Delors Committee and then in the work preceding the Maastricht Treaty a blueprint for the establishment of monetary union was laid out. Only the section on Italian economic diplomacy and the Communists response on the Andreotti’s Cabinet decision to joins EMS in December 1978 are presented here.
In depicting the broad institutional evolution, the history inevitably has to include a discussion of how at particular crisis moments, corresponding frequently to problems of the global financial order that strained European politics and required institutional innovation, politicians produced new and increasingly sophisticated responses. In the 1970s, the “Italian problem” made headlines in the economic press. Commentators, on a pleasant holiday from sober language, gloated over “the sick man of Europe” fiddling on “the edge of a precipice” or “the brink of disaster” or “the bridge of the sinking Titanic” according to the writer’s taste. Austere financial periodicals relished predictions that Italy would go to bankrupt. The attitude of international officialdom was far more discreet in form, but scarcely different in substance. The pressure mounted, and it was effective. Actually after the crisis of the Bretton Woods system, when the European Economic Community commissioned a report on monetary union, and later when the weakness of the dollar pushed European leaders to establish the European Monetary System along with an Exchange Rate Mechanism, Italy was not the only western European “sick man”.
The problems of economic policy in Italy in that period must be examined within the wider international, and especially European context because as never before, the direction, the intensity and the timing of internal policies has come to depend on external variables. And the political attitude to consider Italian problem as a part of a larger European problem, was profoundly present in the European establishment, especially in the German one. Is a matter of fact that the EMS negotiations were generally seen as part of the overhaul of the financial architecture for managing the restored international monetary regime of the Bretton Woods order, but European Monetary integration was seen by its architects as a self-conscious response to the rapid decline of the dollar in 1977-8 and the search for a new mechanism internationally to replace the dollar standard and to face the persistently instability in the international economic relations.