“French Aversion to Independent Monetary Authority and the Development of French Policy on the EMU Project”

Howarth, David. (1999) “French Aversion to Independent Monetary Authority and the Development of French Policy on the EMU Project”. In: UNSPECIFIED, Pittsburgh, PA. (Unpublished)

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Abstract

The Jospin Government’s demands to create a stronger political control over European monetary policy reflect a deeper concern in French political and administrative circles of the problematic political and economic nature of central bank independence. French opposition to central bank independence is rooted in four factors: the republican tradition; the perception of the appropriate link between monetary and economic policy; the belief that low inflationary policies do not require independent central banks; and the institutional power concerns of the French Treasury. This opposition shaped French positions on the details of the EMU project, the intergovernmental negotiations and their outcome. An appreciation of this opposition is thus necessary to understand the nature of French motives and the process leading to EMU. It also demonstrates the strengths and weaknesses of the leading explanations for French support for EMU and, more generally, the process leading to monetary integration.

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