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I think, in that connection, this paragraph is important:
First, the collapse of the  Bretton Woods system of fixed exchange rates pegged to the US Dollar, and by proxy gold, presented the threat of competitive devaluation for intra-European trade.  The experience of the 1930s, in which countries attempted to decrease the cost of their products in foreign markets through currency devaluations, haunted the policymakers of that time.  Thus you get an attempt to restore  a system of fixed exchange for intra-European trade after the  loss of a global system provided as a public good by the US government.
In other words, it's the fact that EEC "partners" didn't trust each other not to engage in an exchange-rate race to the bottom... and they still don't, to this day.

Where there is no trust, how can you have a monetary union, let alone a political union?

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Mon Apr 9th, 2012 at 08:37:38 AM EST
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