resident of the EC comission, Jacques Delors, together with the central bank governers and asmall team to examine the process by which an Econimic and monetary union (EMU) might be achieved. The Delors report recommened a thrre-satge approach to EMU. His report said that fixed exchange rates were necessary for EMU and needed to be accompanied by common monetary policy. Stress was laid on the need for convergence of macroeconmic policies and performance and that they should be parallel with the development of the necessary policy and institutorial arrangements.Although reference was made to the need for fiscal and budgetary, as well a s monetart, coordination, the fiscal and budgetary implications were not spelled out in the same detail as was the case in the Maastricht Treaty. His report and recommendations were the basis for the Maastricht Treaty.The Maastricht Treaty on European Union is a complex document and can be split up into many catorgries, but for this paper we will concentrate on the EMU aspect of the new, modified and enlarged economic, social and cultural competences provided under the Rome Treaty. Under a new article 102(a) member sates are required to conduct their economic policies with a view to achieving the objectives of the Community as laid down in article 2. Article 2 includes the need for economic convergence and the establishment of EMU. In respect of coordination, new Article 103(a) declares that it will be under the direction of the Council of Ministers, who will draw up broad guidelines on the member state economic policy which will be discussed by the European Council. To facillate coordination a Monetary Committee was set up in an advisory role with immediate effect. However there were different views on how best to proceed towards the ultimate goal of convergence. Monetarists believed in locking the exchange rates at the outset, thereby forcing member staes to apply the appropriate monetary dicipli...
