Euro to spark political integration
BBC December 29, 1998
The president of Germany's Bundesbank, Hans Tietmeyer, has said that the introduction of Europe's new single currency, the euro, should be accompanied by more political unity. Mr Tietmeyer, one of Europe's most influential central bankers, now says that EMU has to be accompanied by a "high degree of political unity at a European level". Speaking on German radio he warned that "if everyone goes their separate ways, that could lead to conflicts with what will be a supranational monetary policy."
He warned that the launch of the euro would intensify the competition between the economies in the eurozone. Until recently, countries with high unemployment were able to increase their competitiveness through currency devaluation. EMU will make that impossible. Mr Tietmeyer's conclusion is that high unemployment can only be tackled through closer political co-operation.