elgium, France, West Germany, the Netherlands, Italy and Luxembourg to facilitate the free movement of goods, services and factors of production. Essentially, these European governments sought to eliminate internal trade barriers, create common external tariffs and harmonies member states laws and regulations (Hill, 2001: 233). This movement towards a common European market continued with relative success until the late 1960s. During this period, the Bretton-Woods Exchange Rate Regime had begun to exhibit unmistakable flaws, whilst global inflation was alarming high. In addition, the revaluation of the German Deustchemark and the devaluation of the French Franc, created considerable exchange rate volatility within Europe (Barber, 1999). It was a common held belief amongst many member states, that Europe’s ability to compete within the global economy hinged on the introduction of a single currency (d’Estaing, 1997). Hence, in 1970 the Werner Committee was established to resolve the most efficient means to converge economic performance and currencies (Harris, 1999:76). The Werner Report proposed a three-stage process for achieving a complete monetary union within a decade. The final goal would be the free movement of capital, the permanent locking of exchange rates and the eventual replacement of the EC6 nations notes and coins with a single currency (Barber, 1999). The committee proposed a complete European Monetary Union by 1980, however the failure of the Smithsonian Agreement, the subsequent introduction of a floating exchange rate regime and the infamous Oil Price Shocks of the 70s, caused the plans outlined by the Werner Committee to be abandoned (Harris, 1999:79). In retrospect, the endeavors of the EMU were bold considering the erratic economic climate of the 1970s (Kenwood and Lougheed, 1999:310). Yet, even in this period of economic uncertainty, EC member’s still persued the concept of European Unity (Princeto...
