AMUE tentacles reaching abroad
The adoption of legal and technical frameworks for the introduction of a European monetary union at the June Amsterdam Summit was a triumph for Euro-currency-hungry corporations and banks. And for the Association for a Monetary Union of Europe (AMUE), it meant the end of a decade-long mission to hasten economic and monetary union and to make Europe a more hospitable place for companies and banks to do business.
AMUE, founded in 1987 by corporate giants Philips, Fiat, RhonePoulenc, Solvay and Total with the support of the French and German governments, is the financial offspring of the European Roundtable of Industrialists (ERT). AMUE president Viscount Etienne Davignon -- former EU Commissioner of Industry and current head of Societe Generale de Belgique -- still keeps his fingers in the ERT as well as in other important industry lobby groups. Thanks to its fraternal relations with the European Commission, AMUE has enjoyed enormous influence in pushing through its agenda over the past years.
Now that EMU is firmly in place, AMUE's work in Europe will focus more on the technical details of the conversion. Abroad, however, AMUE is eager to explore the single currency's "major impact on corporate planning, not only in Europe but also around the globe".
As a reflection of that wish, AMUE held its ninth annual meeting in Frankfurt on July 1st with a razzle-dazzle simultaneous linkup to financial conferences in London, Milan, New York, Paris and Tokyo. The conference was titled European Monetary Union: Its Impact on the International Financial Markets and its Implication for the World Economy. Speakers were an impressive all-star list from the world of money: AMUE president Davignon; the finance ministers of Germany, Portugal, and Austria; European Commission President Jacques Santer and Commissioner for Economy and Finance Yves-Thibault de Silguy; European Monetary Institute president Wim Duisenberg; UNICE president François Perigot; leading members of the Italian, New York, German, British, Japanese, and Paris stock exchanges; governors of the Banks of England and France and president of the Deutsche Bundesbank; Deputy Secretary of the US Treasury Lawrence Summers; and top corporate men from Fiat and Philips.
Davignon's speech to the Frankfurt general meeting radiated confidence and hope: economic convergence is now broadly achieved, such that the birth of the euro will be possible in 18 months. Inflation has been curbed in 14 countries and interest rates have not been as low for decades.
Although many countries will not meet the convergence criteria in the strict sense of the word, governments and AMUE Euro promoters have decided that flexibility in the selection of currency-sharers with the focus on 'trends' and 'conditions' rather than strict numbers is the preferable strategy. As Davignon graciously conceded in his speech: "No country should feel excluded if it has demonstrated success in addressing essential reforms."
Davignon acknowledged widespread scepticism and frustration throughout Europe, particularly among workers, noting that "enthusiasm has turned to indifference and even hostility in some countries. Hit by unemployment, people have come to believe that the position has been aggravated by the rigours of convergence." The answer, he insists, is the "stabilization of public expenditure ... to create a favourable environment for growth and employment."
Links between AMUE and the European Commission are practically seamlessly smooth. The EMU project has the firm and transparent backing of Commission President Santer, and AMUE receives both "financial and intellectual contribution" from the Commission. AMUE has been given the green light to represent Commission interests on financial and trade issues in various fora: for example, co-organizing a meeting in Seoul, Korea last year in cooperation with the European Monetary Institute "to discuss future relations between the euro and currencies of emergent nations". A similar conference took place in New York in April of this year, which "gave several hundred American financiers the opportunity of discussing the euro with EU Commissioner de Silguy, President of the European Monetary Institute Alexandre Lamfalussy and the American Under-Secretary of the Treasury Lawrence Summers."
But perhaps the crowning example of AMUE's integration into the global financial world is the date of its meeting in September in Hong Kong -- parallel to the annual meeting of the IMF and World Bank. From its humble origins of the brainchild of a few corporate CEOs and EU commissioners not so many years ago, AMUE has risen in status to become among the kings of global economic and monetary planning.