Study On The Coordination Of EU's Monetary Policy

When the transit of the 20th century to 21st century, on the basis of economic community and common market, European economy integration carries through more deeply and turns out to be a closer union—monetary union. Monetary union did not come into being suddenly but developed for quite a long time. Monetary integration is developing with economy integration. The formal introduction of Euro democratically and equally initiates area monetary integration and has great influence on economy of EU as well as the whole world, which primarily has three aspects as following: Firstly, the birth of Euro will gradually change the international momentary system and enable it to be the two-pole rivalry state between dollars and Euro. Secondly, EMU will exert great influence of demonstration to other economy unit and huge effect on the current floating exchange rate. The successful proceeding of EMU will have great demonstration influence, which leads to the discussion of establishing monetary area in economy unit, such as East Asia and Africa, and the tendency of returning to fixed exchange rate. Thirdly, the uniform currency will deepen the integration of product, labor and financial market in European' s countries, which enables economy of the European' s countries progress toward the same rate and fosters the advancement. In such background, the domestic and foreign scholars begin to do the extensive research about function of EMU from different angles, however, they pay attention to the theory of monetary integration,theory of international monetary policy coordination,theory of European Central Bank System(ECBS),monetary policy of European Central Bank,coordination between uniform monetary policy and independent financial policy in Euro area,apocalypse of Euro internationalization and successful experience to the cooperation of other economy unit and so on. Although the successful function of EMU and circulation of Euro were contributed much to the effective long-term coordination of monetary policy in all European countries, the particular researches about coordination system of European countries' monetary policy are comparatively few. Therefore, the coordination of EU' s monetary policy has much research significance and science value, which is the writing purpose of this paper.This paper takes the coordination of European Union' s monetary policy as the research object and conduct research on it from historical and institutional perspective. The aim is to find the developing mode of coordination of European Union' s monetary policy in current times and future times. There are some questions in the paper. 1. In the past time, which coordination methods did the member countries of EU choose? Why did the member countries innovate in these methods? 2. Which coordination methods do the member countries of EU choose? How do the methods affect EU' s economy? 3. Are there any problems in the coordination of European Union' s monetary policy? How to do with them? 4. Which mode will the coordination of European Union' s monetary policy choose? 5. What revelations can the coordination of European Union' s monetary policy bring for China? The answers to above-mentioned problems form the research train of thoughts in this dissertation. As far as analytical methods are concerned, the dissertation has adopted historical method united with logical method, the standard analytical method combined with the demonstrative analytical method and theoretics connected with practice. This paper contains seven parts in all.Chapter 1 is introduction. The introductory part describes the background and propose of the selected subject, and then argues the theoretical and practical value; the introductory part also generalizes the research system and main content, points out the research pivots and difficulties, ascertains the direction of research; In addition, the introductory part clarifies the principal object in detail and particularizes the circumscribed concepts used in the research; In the second place, the introductory part analyzes coordination of EU' s monetary policy from two aspects of theory and historical development.Chapter 2 is academic basis of coordination of EU' s monetary policy . The paper chiefly analyzes two theoretical genres supportingcoordination of EU' s monetary policy-optimium currency area theoryand international coordination monetary policy theory, and appraises them as well as points some places which need perfecting and developing. From the point of view combining theory with coordination of EU' s monetary policy, the author explains the necessity and feasibility of the coordination of EU' s monetary policy and indicates it has exceeded the theoretical progress, hence , it is very meaningful to treat such a phenomenon as a research example.In the 3nd chap, from historical angle the paper investigates development of the coordination of EU' s monetary policy at different periods and analyzes those factors promoting coordination of monetary policy in European countries. It divides coordination of EU' s monetary policy into different phases and vertically compares the coordination of monetary policy at different phases , meanwhile, analyzes its successiveness. That is to say. such factors as the successively in-depth European economy integration,search for dominant area money etc play an important role as impetus of proceeding the coordination of EU' s monetary policy.In the 4nd chap, the coordination of EU' s monetary policy is studied from angle of system and its system' s evolution direction is analyzed either. The coordination system of EU' s monetary policy principally contains two major parts: one is the single monetary policy, the other is the coordination of monetary policy in and out area, utilizing exchange rate mechanism II as pivot , which is leaded by ECBs. Combined with the practice of EMU, the economy effect resulting from the function of such system is empirically analyzed.In the 5nd chap, we emphasis on the research about duality contradiction aroused by the coordination of EU' s monetary policy when Euro formally circulates , and make a breakthrough research at the conflict of the interior monetary policy coordination and at other conflicts between single monetary policy and macro-economy policies such as social security policy and so forth in Euro areas.In the 6nd chap, pointing to conflicts in the coordination of EU' s monetary policy , and linking the past successful experience with the pratice of European Union' s expanding to east and its economical and political development, we apply the governability theory in politics to the research of coordination of EU' s monetary policy and bring forward theoretical hypothesis of reforming and developing coordination of EU' s monetary policy.Finally, by adopting experience of coordination of EU' s monetary policy, we investigate the prospect of cooperation among currencies of East Asian and put forward the viewpoint of strengthening the coordination of monetary policies to accelerate the cooperation of East-Asian' s currencies.The following aspects are also explored in this dissertation.First, extend the meaning of monetary policy coordination in EU. The coordination of EU' s monetary policy is that ECBs adopt a series of methods to establish the relatively stable currency area. It includes not only the coordination of the aim of monetary policy, the coordination of preference of monetary policy, the coordination of interest policy, but also the coordination of exchange rate policy.Second, the EU' s monetary policy coordination mechanism has been divided for the internal movement and exterior coordinates. The internal coordination mechanism is that the European Union various member nations carry on the coordination on the monetary policy, for instance the coordination of monetary policy goal, the coordination of monetary policy orientation, the coordination of interest rate policy. Exterior coordination the mechanism is the European Union various member nations carry on the coordination between the monetary policy and other macroeconomic polices.Third , the coordination of EU' s monetary policy in different times is compared and the characteristics of coordination of monetary policy has been induced. The coordination of EU' s monetary policy is divided into different development phases in historical aspect. The author compared the coordination of EU' s monetary policy in different times in these aspects, such as the main body, the depth, the mechanism and the effect of coordination. It has regulation, gradual and superanational characteristic.Fouth, there is Path-Dependence in the coordination of EU' s monetary policy. Looking over the developing process of the coordination of EU' s monetary policy, we can find that the past phase locked the tendency of next phase and next phase adopt the experience of past phase. This causes the the coordination of EU' s monetary policy to develop in an anticipated path.Fifth, This paper summarized the principals of the coordination of EU' s monetary policy. The principal of convergence of system guarantees the stability of the coordination of EU' s monetary policy. The principal of multi lateral ism negotiation keeps the flexibility of the coordination of EU' s monetary policy. Principle of subsidiarity shares the authority of the coordination of EU' s monetary policy reasonably. The principal of cost compared with benefits shows the preference of the coordination of EU' s monetary policy.Sixth, the coordination of EU' s monetary policy and other macro-economical policies have different development patterns. European countries have adopted the different development patterns in the different development phase, even if EU does not have completely use the identical pattern in current times. These pattern includes mulual adjustment, intergovernment negotiatation, supranational , Joint decision mode and the open method of coordination. The degree of EU economic integration is not same in various stages. This causes diversification in the coordination of EU' s monetary policy and other macro-economical policies.Because of the difficulty of getting data, The paper didn' t do thorough research to the cost and benefit which monetary union brings to EU. As far as benefit is concerned, only a few indexes were chosen, such as the development of economy, trade and specialization. As far as cost is concerned, the paper did not investigate the effect of unsymmetrical shock in practice. The advancement of institutional innovation of the coordination of EU' s monetary policy is not based on itself. It must be proved by the development of productivity. All of these are the focus point which the author will continue to pay attention to.