'The Disadvantage of Tying One's Hands': Towards an Understanding of the Controversial Nature of Europeanisation in the Area of British Monetary Policy

Buller, Jim. (2004) 'The Disadvantage of Tying One's Hands': Towards an Understanding of the Controversial Nature of Europeanisation in the Area of British Monetary Policy. In: UNSPECIFIED, Sheffield, UK.

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Abstract

[Introduction]. What is it about the Europeanisation of British monetary policy that merits attention? From a superficial glance at the subject, one might conclude: ‘not a lot’. In policy terms, this Europeanisation process as represented by sterling’s membership of the European Exchange Rate Mechanism (ERM) appears to have lasted a mere two years. As is often the case, Britain joined late (October 1990), found the experiment an uncomfortable experience before crashing out spectacularly in September 1992. Since then, while paying lip-service to future membership of the euro, the Treasury, first under Lamont, then Clarke and now Brown, has gone about carefully constructing a domestic institutional framework for confronting issues and problems in this particular policy area. Most notable in this context has been the decision to grant operation independence to the Bank of England to control inflation, as well as the introduction of two fiscal rules designed to place explicit limits on government borrowing and public debt. Commentators who predicted that New Labour would join the Single Currency in its first term, have been forced to revise these arguments.

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