Macro Economic Convergence in Europe

Abstract

Economic convergence within the EMS member states is a precondition for further moves to economic and monetary integration. The Delors Report has set out a path toward EMU in three stages, where transition to the next stage depends on some degree of convergence being achieved in the previous stage. In October 1990, the European Council in Rome agreed that ‘in order to move on to the second phase (of economic and monetary union), further satisfactory and lasting progress toward real and monetary convergence will have to be achieved’ (Press communique, European Council, Rome, 28 October 1990). The draft treaty text for the Maastricht summit states that before the start of the second phase in January 1994, the council shall assess the progress made with regard to economic and monetary convergence, and in particular with regard to price stability and balanced public finances.