Perspectives on the European Monetary Union: lessons for the Economic Community of West African States (ECOWAS)

Abstract

The attainment of the European Monetary Union (EMU) under the auspices of the European Union (EU) was a product of effective planning and sequencing of programmes. The establishment of political institutions such as the European Council, Assembly, Court of Justice and, particularly, the European Commission provided the general framework and direction for the achievement of the EMU. In addition, specialized institutions such as the Sectoral Commissions, European Monetary Institute (which was later transformed into the European Central Bank) and the European System of Central Banks provided technical support for driving the EMU project. These institutions nurtured and fostered the political, social, market, financial, infrastructural, production, economic and monetary sectors of integration. The EU experience had significant integration implications for currency, money market, capital market, foreign exchange market, reserves management and economic policy. It also had implications for the non-EMU members referred to as the derogation countries. The overall EU experience has profound and important lessons for the Economic Community of West African States (ECOWAS) in its drive to provide the needed political will, social enlightenment campaign and mobilization for the acceptance of integration, as well as the provision of standardized products and financial markets. It also reveals the levels of basic infrastructure, production and overall economic structure that are needed to be in place, before transiting into a monetary union.