Enlightenment Of European Currency Cooperation's Experience To East Asia

From the 20century 50years,the European countries have been trying the biggest economy integration in the Europe history. From the free trade area as the beginning, it experiences the tariff union, the common market, the economy association, and finally achieves the highest form of economy integration. This form is currency integration, which creates a new kind of common money-Euro during the number countries of Europe Monetary System Union. As to international monetary system, the appearance of Euro means the most important change after the disintegration of Bretton Forest meeting as well as the main trend of contemporary international monetary regionalized development.Under the inspiration of European Union countries'success in monetary integration, now there are many countries and areas trying to achieve international monetary cooperation, the most prominent areas are the East Asia and the Southeast Asia where the countries are attempting to carry on the regional currency and finance cooperation. The Association of Southeast Asian Nations suffered the heavy losses in Asian financial crisis in 1997, thus earnestly hope to guard against and melt the impact the currency finance crisis possibly brings through the national currency and finance cooperation in the region. In 2000, the Association of Southeast Asian Nations signed the bilateral currency summon agreement with China, Japan and the South Korean separately. This action has represented the new beginning of regional currency and finance cooperation. In addition, after Japan proposed establishing the Asia currency fund in the Asian financial crisis in 1997, many government officials and economists of the Association of Southeast Asian Nations still often put forward such proposals. There are also some economists who continually discuss the appearance possibility of the common currency - Asian Yuan or East Asian Yuan in East Asia in the future. The author is also willing to make a shallow attempt in this aspect.This article divides into four parts altogether: The first part is for the commentary on regional currency cooperation theory. First, elaborated Robert Mundell's optimum currency area theory, according to his formulation, so-called "the monetary area" refers to a kind of currency alliance, which is composed by different countries and areas, and there is only one kind of currency in the region as the sole currency, or although has several kinds of currency but the exchange rate between each other is fixed and they keep the same exchange rate with other kinds of currency. "Optimum" here is defined to be the ability of keeping domestic employment and the price level stable. Then, elaborated the parallel currency theory. This theory believed that, the parallel currency is the best way to achieve the ultimate objective of currency alliance. Using this kind of currency will be helpful to suppress the inflation and alleviate the member nations'political and economical pressure. The second part is for European currency cooperation evolution way. First, reviewed the European currency cooperation evolution way, which may be summarized that: Establish European parallel currency on the base of the member nations'currency movement, then transit the parallel currency to the sole currency - Euro. Next, elaborated the European exchange rate policy coordination. The European Economic Community various members have official cooperation in the exchange rate aspect for three times. The first was Werner Plan in 1971, which proposed "crawled to the hole" exchange rate mechanism. The second was Copenhagen Conference in 1978, which proposed establishing the Europe exchange rate mechanism (ERM). The third was Joint Pledge of Stabilization and Growth in 1996, which proposed establishing the second exchange rate mechanism. Once more, elaborated the financial discipline and the common financial system in the European currency cooperation. In order to coordinate the currency cooperation, Europe carries on strict financial discipline and financial system. The financial discipline mainly manifests in the stipulation of Maastricht Treaty and other such kind of documents. The common financial system has manifested a kind of financial power divination mechanism arrangement between the sovereign state and the ultra state institution. Finally, elaborated the organization management institution and the system in the European currency cooperation. Maastricht Treaty's final request to the currency alliance is to establish Central Bank in the European Union to be responsible to formulate and the execution common monetary policy, and release unified Europe currency. In order to achieve the above goals, "Horse" has approximately stipulated a currency integration plan which will be carried out in three stages.In the third part, this paper focuses on the present situation of Asian currency cooperation. Firstly, I looked back the historical developmental course of Asian currency cooperation. In 1987, the establishment of APEC promoted the investments and the trade among 18 member countries, but the cooperation in the currency aspect only takes an assistance discussion. In February 1991, with the EMEAP's establishment, the Asian currency cooperation stepped out to the first important step. Next, this paper elaborated the operating mechanism and the progress of Asian currency cooperation. Along with the East Asian economy cooperation developing, the economical relation is more and more close among the East Asian countries; the interdependent degree is enhanced day by day. These lay a good foundation for further currency cooperation. After 1997, East Asia strengthened cooperation in the currency domain on the base of economic cooperation among them. Until now, the East Asian currency cooperation has already lasted for 7 years with members' joint effort and has already made a certain progress. Has already established currency swap mechanism, the regional monetary fund, the regional exchange rate coordination mechanism as well as the bilateral payment agreement in East Asia. The substantive research has also conducted on information communication, risk prevention, bond market, etc.Fourth part is the comparison between European and East Asian currency cooperation and the enlightenments that we can learn from Europe. First, carries on the comparison between European and the East Asian currency cooperation agent. Next, carries on the comparison on the currency cooperation pattern. Once more, carries on the comparison in the exchange rate system. Then, carries on the comparison on the macroeconomic policy. Finally, carries on the comparison on the organization management and the system construction. Through the above comparative analysis, East Asia may obtain following several enlightenments: (1) The regional currency cooperation will be the key point of the world finance reform in future; (2) the macroeconomic policy coordination is the safeguard of the regional currency cooperation; (3) the region currency cooperation may effectively suppress the impact of the speculative capital; (4) the region currency cooperation cannot live without the national policies; (5) the system construction is the essential part of region currency cooperates;(6)"The parallel currency"is inevitably choice in the region currency alliance transition-period.