He criticised as 'fundamentally flawed' the official British view that the EMI will not make any difference in bringing the European Union closer to monetary union, and said a common currency was indispensable to the single market 'and an essential step towards a federal Europe'.
Mr Maystadt, the Belgian Finance Minister, who was in London setting out his view of the second stage of the monetary union process, which begins on 1 January next year, said there was no point in returning to the old system of narrow fluctuation margins in the ERM.
'The financial markets have recently learned how vulnerable the former mechanism is,' he said. It was doubtful whether it would ever regain the credibility to withstand exchange market pressures.
His proposal would mean in effect ceding some of the powers held by member states to this 'independent body'. At present all decisions on the ERM are taken by the EU's council of finance ministers, advised by the powerful and secretive Monetary Committee of finance ministry and central bank officials chaired by Sir Nigel Wicks, a senior British Treasury official.
Mr Maystadt, whose views are widely respected in the European Union, said that the EMI should be used to buttress the ERM, 'thereby paving the way for a stable system of narrow fluctuation margins' in the run-up to a single currency and monetary union by 1 January 1999.
He was unequivocal in his support for eventual monetary union and warned that the present wide exchange rates would undermine the single European market.
The push for growth, employment and competitiveness being launched at the European summit in December would succeed only in a climate of stable exchange rates.Reuse content