FLEXIBLE INTEGRATION AND EUROPEAN-MONETARY-UNION

A recent CEPR report, Dewatripoint et al. (1995), has argued that the concept of 'flexible integration' should be applied in a number of pol icy areas in the European Union, most prominently among them the monet ary union. But making the latter non-mandatory commitment and leaving monetary policies to be coordinated only indirectly through the pursui t of apparently consistent national inflation targets would create sev eral problems without delivering the degree of exchange-rate stability required for the Single Market. In particular, national inflation tar gets would be very difficult to enforce and joint preparation of the c ommon monetary policy for those who join the monetary union would beco me more incomplete than is already the case. (C) 1997 Elsevier Science B.V.