The Werner Report

The concept of economic and monetary union was first discussed in 1969 at an EC summit in the Hague, the Netherlands. The background was that trade between EC member states had increased greatly as a result of the customs union, and the aim was to enhance European cooperation. After the Hague summit, an expert working group was set up, headed by Pierre Werner, prime minister and finance minister of Luxembourg. The group presented the Werner Report in 1970. The Werner Report contained a detailed description of the establishment of economic and monetary union in three stages up to 1980. The countries were gradually to increase the coordination of their economic policies and reduce exchange﷓rate fluctuations. At the final stage exchange rates were to be locked irrevocably. In addition to a common monetary policy these plans also entailed that a number of fiscal-policy decisions were to be made jointly. However, the first plans for economic and monetary union were never realised. This was partly due to the considerable international currency unrest after the collapse of the Bretton Woods system in the early 1970s, and the international recession in the wake of the first oil crisis in 1973.