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Monetary Unions (current and future)

Monetary Unions are groups of countries which share a currency. Usually, they share geographical borders, but not always. Also, they often have close trade and other financial relationships.


The goal of the Single Global Currency Association is the establishment of a single global currency , within a global monetary union and managed by a global central bank by 2024.  


The Euro.
The largest and best known monetary union is the "eurozone" where the euro is the monetary unit utilized by 12 of the 15 countries in the European Union. The 12 members are: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Nethlerlands, Portugal, and Spain. When 10 more countries are added to the E.U. in 2004, the eurozone will be poised to increase to 22, as the "accession countries" fulfill the monetary requirements one-by-one. 

Maastricht Treaty
This site contains the text of the Maastricht Treaty which was signed in 1993 and ratified by the member countries in 1993. This treaty commited the participating countries to a single European currency.

European Central Bank
This bank was established to implement and manage the euro. This site is a treasure trove of information about this most important single regional currency.

The euro
This is the official web site of the euro, from the site of the European Central Bank.

The "Euro Homepage" by Giancarlo Corsetti at Yale Univ., USA
This website has information about the euro, as assembled by Professor Corsetti who teaches at Yale and the University of Rome III.

The Euro – Europe’s Single Common Currency.  a good list of related websites by the Davies family (see below)  Also, this site contains a link back to the  Single Global Currency Association site.


Should the United Kingdom join the Euro?
One of the most comprehensive "yes" speeches is by Willem Buiter, of the European Bank for Reconstruction and Development. His speech, "Optimal Currency Areas: Why Does the Exchange Rate Regime Matter?"  was given in 1999 at the Royal College of Physicians in Edinburgh, Scotland.  In August, 2002, Mr. Buiter joined Richard Layard, Christopher Huhne, Will Hutton, Peter Kenen and Adair Turner (with a foreword by Paul Volcker), in the essay “WHY BRITAIN SHOULD JOIN THE EURO”. 

See also the  five criteria analysis by the U.K. Treasury: “The Five Tests Framework”  and at “UK membership of the Single Currency – An assessment of the five economic tests”

Should Sweden have joined the Euro?
See the Swedish government’s web site about that country’s referendum at Sweden and the euro.


Brunei-Singapore Monetary Union.

   This Currency union has existed for over 30 years, and briefly included Malaysia.  See Ngiam Kee Jin’s article, “Financial and Monetary Cooperation in East Asia: The Singapore Perspective"

East Asia Currency Union (in planning stage)
A meeting of the finance ministers of 15 European Union countries and China, Thailand, Indonesia, Malaysia, Brunei, South Korea, Vietnam, Singapore, The Philipines and Japan approved a plan to work toward a single Asian currency. The ministers considered the "Kobe Report" (to be considered later, perhaps as the equivalent of the European Delors Report) with its goals of a three step programme to lead to a single currency by the year 2030).

See also Monetary and Financial Cooperation in East Asia: Lessons from Europe, a speech by Tadeo Chino, President of the Asia Development Bank. 5 July 2002.

South Asian Association for Regional Cooperation. (SAARC)

   Established in 1985 by the countries of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, the Association seeks coordination in a number of areas, including the economy.

    In January, 2004, Indian Prime Minister Vajpayee urged more economic integration and movement toward a common currency.  See “Can South Asia adopt a common currency?” by Sweta Chaman Saxena of the University of Pittsburgh, in the Journal of Asian Economics, August, 2004.   She concludes that South Asia should establish an economic union by 2020, including a common currency and notes in words uncharacteristic for academic papers, "Needless to say, the improvement in the welfare of a billion plus population in that region would be tremendous!"



The United States

  Most people do not consider the U.S. dollar as a common currency, that that is how it began, when the 13 original U.S. colonies decided to join together in a political union, as in "United States" and a monetary union, as we call it now.  For a discussion, see Marthinsen’s and Edmunds’ “Wealth by Association”    

Central American Monetary Union Council (in English at IMF site)
The Central American Monetary Union Council was established in 1964 by the central banks of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, with the purpose "to promote the coordination of credit and exchange policies which would progressively form the basis of a Central American Monetary Union. The above mentioned agreement was replaced by the Central American Monetary Agreement which became effective on October 25, 1974 and was modified on January 22, 1999.
Another site, in Spanish, for the Central American Monetary Union is at

Eastern Caribbean Central Bank (Monetary authority for 8 countries)
      This monetary union was created in 1983 and it manages the single common currency for eight Caribbean countries: Anguilla (joined 1987), Antigua and Barbuda, Commonwealth of Dominica, Grenada (joined 1968), Montserrat, St Kitts and Nevis, St Lucia, and St Vincent and The Grenadines.  It was preceded by the British Caribbean Currency Board which began in 1950.  Trinidad & Tobago left the Currency Board in 1962, Guyana left in 1965 and Barbados left in 1972. 
    Its charter is: "To maintain the stability of the EC dollar and the integrity of the banking system in order to facilitate the balanced growth and development of member states."


Gulf Cooperation Council Monetary Union
This site is the BBC News announcement of the plan by the six Arab Gulf states to ask the European Central Bank for guidance on how to implement a single regional currency. The six states are Saudi Arabia, Qatar, Bahrain, Oman, Kuwait, and the United Arab Emirates.
The six states aim to achieve a single currency by 2010.
For a Bahraini perspective on the GCC Monetary Union click on Bahraini Perspective.

The European Central Bank is providing consulting support to the GCC. See the June 2005 published article, “Regional Monetary Integration in the member states of the Gulf Cooperation Council”


West African Economic and Monetary Union (WAEMU)
WAEMU was formed in 1994 with seven member countries: Benin, Burkima Faso, Ivory Coast, Mali (left in 1962 but rejoined in 1984), Niger, Senegal and Togo. The 8th country is Guinea-Bissau(joined 1997).   These countries share the CFA franc as their common currency, arising from their French colonial heritage.  CFA stands for Communaute Financiere Africaine in the WAEMU and for Cooperation Financiere en Afrique Centrale in the CAEMC.

   The WAEMU succeeded an earlier union called the West Africa Monetary Union. For a 1998 view of WAEMU from the IMF Deputy Director,  see Statement by Alassane D. Ouattara

    "At least 65% of the central bank reserves are held with the Frenc treaury, which guarantees ist ocnvertibility into euros.  It has been pegged to the French franc, and now the euro, for this period, but was devalued by helf in 1994.  Both the central African and west African currencies are commonly called the ‘CFA franc’ but are not legal tender in the other region.  In theory they could have different values but in pracice they have always been the same." from “Economic Aspects of regional currency areas and the use of foreign currencies” by John Hawkins and Paul Masson, Bank for International Settlements, May 2003.

Central African Economic and Monetary Community (CAEMC)

With six countries: Cameroon, the Central African Republic (C.A.R.), Chad, the Republic of Congo, Equatorial Guinea (joined in 1985 and is the only non-former-French colony), and Gabon. These countries share a common currency, the CFA franc, where CFA stands for Communaute Financiere Africaine in the WAEMU and for Cooperation Financiere en Afrique Centrale in the CAEMC.  


28 February 2005  “Southern Africa aims for monetary union by 2016”   (from Reuters, South Africa)

The article begins:

CAPE TOWN (Reuters) – Countries within the 14-member Southern African Development Community (SADC) have decided to achieve monetary and economic union by 2016, South Africa’s central bank governor Tito Mboweni said on Monday.

“The idea as I said is that by about 2016 there should be a SADC monetary union — by definition a SADC common currency,” Mboweni told reporters in reply to a question.

“What the currency is going to be I don’t know — that will be a subject of negotiation and discussion.”

Mboweni was speaking after a meeting of SADC central bank governors in Cape Town, which was also attended by European Central Bank President Jean-Claude Trichet.

[The SADC Member States are Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.]


ECOWAS – West African Monetary Zone
Since 1994, other variations of African monetary unions have been considered. In 2001, six members of the Economic Community of West African States (ECOWAS), The Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone, launched an ambitious initiative to set up a second monetary union and common currency in West Africa. The plan was to create a common currency by January, 2004, but that date was unattainable and was postponed.  See an IMF interview with economist Paul Masson, for more info, Paul Masson Interview.


Updates on West African Monetary Zone:

2004  “Public educated on the second single currency”

      Five West African countries are planning a new West African Monetary zone with a common currency to be called the “Eco”.  The five countries are:  Ghana, the Gambia, Sierra Leone, Guinea and Nigeria, and the Central Bank, to begin operations on July 1, 2005, would be in Accra, Ghana. 

     This monetary union would be the second in the area as it’s preceded by the CFA zone of those French-speaking countries using the West African franc. 

     Proponents of the new “Eco” anticipate that an eventual merger of the two monetary unions would be desirable.  ( Accra Daily Mail , 4/22/04)

2005  “Experts Disagree On Deadline for Ecowas Currency” 

from the Abijou Trust via  By Bright Ewulu

The entire article…

    Experts have disagreed over the practicability of the 2009 common currency deadline set by the West African Monetary Zone (WAMZ).

    This disagreement emerged Saturday during Guaranty Trust Bank Plc’s course for financial journalists in Accra, Ghana where Mr. Phillip Buabeng of the National Banking College maintained that the target was attainable while Dr. Ayodele Teriba, managing director, Teriba & Associates Ltd said it will not be met.

    According to Teriba, West African leaders are not serious about meeting the goals set for the introduction of the ECO currency, and so long as this is the case the longer will the goal post be shifted.

    He stated that the example shown by the European Union (EU) countries on the way to introduce the Euro showed that more seriousness is needed in West Africa if they are serious about a single currency for the sub-region, saying that the Europeans gave themselves a time space of eight years.

    Looking back now, he posited that it was instructive that Britain which refused to join the union, strove hard to meet the targets set for the common currency, saying that it was the fact of the EU targets in which only Turkey and Greece failed to meet at that time that made the Euro stronger that the dollar today.

    On his part, Mr. Buabey stated that there is noticeable improvement in the economies of West African countries and that if they implement effective fiscal and monetary policies the yard sticks set out could be met.

    He stated that the continued shifting of the timeline is not beneficial to the sub-region, saying that some countries have already met some of the requirements in the area of external reserves, interest and inflation rates.


10 October 2006.  “WAMZ [West African Monetary Zone] To Start Trading In Local Currencies” by Boahene Asamoah in Graphic Ghana

In its entirety…

   Member countries under the West African Monetary Zone (WAMZ) will by the end of this year start a process towards a more accelerated regional integration with a proposed quoting and trading in currencies within the territories of member states.

   To ensure a smooth implementation of the programme a workshop on “Quoting and Trading in WAMZ local currencies with representatives from central banks, financial institutions and other stakeholders was organised in Accra yesterday.

   Speaking at the function, the Director General of WAMZ, Dr Oku Joseph Nnanna, underscored the need to put in place a framework to formalise informal activities within member countries of WAMZ.

   The main objective of the workshop was to propose options for making WAMZ member currencies convertible to the zone.

   He said the currency convertibility “will serve as a catalyst for the introduction of the single currency, reduce transaction costs and improve foreign reserves of member countries”.

   Dr Nnanna said it was aimed at bringing the informal sector into the mainstream of convergence criteria, adding that it should be possible for businesses in member countries of WAMZ to trade freely without the institutional bottlenecks.

   “We must help our businesses to grow and become enterprises,” he stated, adding that trading in WAMZ currencies would facilitate the introduction of the single currency and trade and generate growth, reduce poverty and create wealth.

   Five countries under the WAMZ, namely Ghana, Nigeria, Sierra Leone, The Gambia, and Guinea have undertaken to adopt a single currency, the ECO, by 2009.

   In 2005, the WAMZ postponed the commencement of monetary union to December 2009.

   The WAMZ approved an expanded work programme to facilitate the establishment of the monetary union.
Dr Nnanna said the informal sector in member countries were already practising the free convertibility of regional currencies in their cross-border activities with significant degree of success under parallel market conditions.

   “The formalisation of these activities will improve their efficiency, minimise the use of cash in business transactions, reduce the incidence of counterfeiting and ensure the expansion of intra-regional trade transactions,” the Director General stated.

Generally on monetary union in Africa

For a 2002 presentation to the Central Bank of Nigeria on the topic of monetary union, with special reference to Africa, see The Challenge of Monetary Union: Gains and Opportunities by Chris Itsede.
For a contrary view on sub-Sahara African monetary union, see
"On the adequacy of Monetary Arrangements in Sub-Saharian Africa" by Agnes Benassy-Quere and Maylis Coupet.