ABSTRACT
The purpose of this chapter is to review briefly some analytical and operational issues which arise at an advanced stage of monetary integration. These issues are relevant to the present rather tightly managed EMS which has developed gradually since 1983, and their resolution could be experimented with in the decentralized and preinstitutional first stage. They are essential in any effort to clarify how monetary policy might be designed and operated in the second stage if a 'gradual transfer of decision-making power from national authorities to a Community institution' has to take place (paragraph 57, the Delors Committee Report, hereafter referred to as 'the Report'). I accept that it may not be possible at the present juncture to propose a detailed blueprint for accomplishing such a transition in stage two, but the considerations in the following sections are kept in sufficiently general terms to incorporate a range of analytical and operational approaches. The chapter is also relevant to the collective management through the proposed ESCB in stage three prior to the introduction of a common currency.
