While admitting the seriousness of the crisis that had occurred in the European Monetary System, the Commission said that there was 'no alternative solution that will assure the prosperity and influence of the European nations'.
Henning Christophersen, commissioner for economic affairs, reported to a special meeting of the Commission that was called back from holiday.
The Commission issued a statement urging member states to co-ordinate their economic policies more closely, saying that if they did not, plans for a single currency would perish. 'One clear lesson is that without closer co-ordination of economic policies it will not be possible to progress towards economic and monetary union', it said.
It admitted that the crisis in the EMS had damaged the EC. The events of the past few weeks 'have weakened the credibility of the European construction and not only EMU', the statement said.
The emphasis on continuity seems likely to be shared by the country that holds the EC presidency. Belgium wants much more fundamental reform of the EMS than envisaged in a report earlier this year by the EC's monetary committee, according to monetary sources in Brussels.
They say that the Belgian government believes the monetary committee looked only at improving the functioning of the EMS. 'This was a crisis of a different nature,' the source said. The Belgians want to prevent any similar crisis recurring.
Reform is likely to dovetail with the setting up of the new European Monetary Institute, expected to be in place by 1 January 1994, when the second stage of EMU begins.
Although it is too early to look at the detail of reform, the Belgian Finance Ministry intends to have a preliminary report ready for finance ministers by the middle of September. But there is no timetable for returning EMS currencies to narrow bands, and this may not be achieved by the beginning of next year.Reuse content