thosTin the franc area. The latter which have, since the aftermath of the Second World War,
officially belonged to monetary unions centred around France, have never quite managed to
implement an actual economic union. Admittedly, such unions as UDEAC and CEDEAO existin principle, but in practice, trade between member countries is negligible. It represents less
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than 10% of their overall foreign trade.30 Lack of specialization has often been blamed for the limited trade among African countries of the franc area. This is not altogether true. These countries do specialize: but in the production of primary goods. The specialization results from the structuring of these economies dating back to the colonial era. At the time, it was incumbent on the colonies to regularly supply the metropolis with raw materials as well as provide it with an outlet for its finished products. African countries of the franc area have continued playing their thankless role as "reservoir of raw materials and dumping ground for manufactured products",31 thereby perpetuating their dependence on industrialized nations. It is no secret that the rate of development is closely linked to the area of specialization. Indeed, with regard to international trade, the development rate of any country varies depending on whether that country is engaged in the production of cocoa or computers. Contribution to economic development varies from sector to sector; furthermore, world demand does not follow a uniform rate or pattern for all the sectors. Whereas demand for computers surges considerably and regularly, the same is not true for cocoa, for instance, owing to widespread use of new materials and to biotechnological advancement.
103. The medium-term effect of setting up the European economic entity within the European monetary entity will be the disappearance of the French franc and the appearance of the euro as the single currency of the European Union. One is then left to wonder about the future of the CFA franc in particular, and the franc area in general. Two scenarios are foreseeable: either the African countries of the franc area continue refusing to take responsibility for their destiny, which might lead to their admission to a future euro institution; or they immediately accept (while there is still time) to disentangle themselves from monetary supervision that persistently subjects their economic policies to foreign realities.
2.1 Avoiding responsibility: line of least resistance
104. The African elite classes have maintained their extreme passiveness. They were interested (only as curious bystanders) in the 1992 signature followed by the 1993 ratification of the Maastricht Treaty instituting the Economic and Monetary Union in Europe; the Union was to be the culmination of a three-stage process:
30 M. LELART: MLa zone franc face a Maastricht". Revue Tiers-Monde. No. 136, october-December 1993, p. 882.
3! This expression is very dear to Professor Georges Ngango.
(i) - the first stage, which started on 1st January 1990, involved the liberalization of capital flow (abolition of exchange controls). This liberalization helped standardize financial markets and encourage competition between financial institutions;
(ii) - the launching of the second stage on 1st January involved the creation of the European Monetary Institute (EMI), an embryonic stage of the future European central bank, whose primary rote is to consolidate the coordination of national monetary policies;
(iii) . the third stage, scheduled to start at the end of 1997, will transform the EMI into the European central bank. This stage itself is split into three phases:
(a) * end of 1997 - beginning of 1998: during this period, it will be decided how many countries seeking membership to the single currency union satisfy the convergence criteria. It should be stated that the Maastricht Treaty defines five convergence criteria:
the budget deficit must be lower than or equal to 3% of the GDP, the public debt must not exceed 60% of the GDP,
the inflation rate must not be more than 1.5% higher man that of the three countries with the lowest inflation,
the long- term interest rate must not be more than 2% higher than that of the three countries with the lowest interest rates,
for eligibility to proceed to the third phase, the last criterion requires a country to have belonged to an exchange facility for two years without
devaluing its currency;
(b) * the Treaty stipulates that single currency be introduced by 1st January 1999. However, the introduction of the single currency on this date does not mean that every country involved will be obliged to immediately abandon its national currency. What it does mean is that from this date, these countries will among themselves apply fixed exchange rates.
Besides, the European central bank will become operational, signalling the introduction of financial transaction (bond issues, inter-bank operations) in the single currency. This, therefore, marks the beginning of a period during which the single currency will co-exist with the national currencies
of the countries concerned.
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(c) * The phase during which use of the single currency will become widespread begins on 1st January 2002, through the circulation of bank notes and coins in European currency.
105. Nowhere in the various stipulations of the Maastricht Treaty is mention made of the franc area as an institution. A single protocol appended to the Treaty stipulates that France will retain the privilege of currency issuance in Overseas Departments and Territories and will, at its discretion, determine the parity of the CFA franc. Two other stipulations of the Treaty deserve particular attention.
106. Between 1997 and 1999, which corresponds to the beginning of the third phase, the euro will gradually replace national currencies. It may, thus, be supposed that a de facto pegging of the CFA to the euro will ensue. Whereas the time-frame for the replacement of bank notes may not appear to hold much significance for African countries of the franc area, the determination of conversion rates is very important for them. Article 109L.4 of the Treaty provides for the determination, by the European council, of these rates. Until 16 December 1995, it was believed that the ecu would be the European Union's currency. Had this been the case, the issue of the determination of rates would probably not have arisen, as the new ecu would presumably have assumed the same value as the current ecu-basket. Rates would be established on the basis of the basket's value, calculated in each of its component currencies. Accordingly, if we take 6.60 FF as the approximate value of 1 ecu, we would have 1 ecu - 660 FCFA. However, such an exchange rate would merely have been an approximation, since it would be subject to modification on reaching the third stage. Actually, the ecu undergoes valuation change whenever the par value of another European currency is changed.32 Under the circumstances, the exact rate of the CFA franc to the ecu could only be known once the ecu had been firmly established as single currency within the European Union. However, the reticence of Germany, which considered the ecu a devalued currency, led the "Fifteen", at the conclusion of the Madrid summit, to name the future single currency "Euro". This name further complicates the situation for the franc area's African countries whose fete in this new environment is in the balance. The situation is even more worrisome since projects for the expansion of the European Union only refer to Eastern European countries, which are free to join the Union until it has twenty five or
twenty seven members.
107. At the beginning of the third phase, definition and implementation of the monetary policy will be the responsibility of a supranational authority, to wit the European central banking system, comprising the European central bank and national central banks. The latter will have lost monetary power as well as the facility to finance State deficits. So far, relations between