The European Monetary System Crisis: Causes and Agendas
Since September 1992, the European Community has been experiencing instability on the foreign exchange markets that may well jeopardise the most ambitious objective it has pursued to date: a common European currency governed by a single central bank. The exchange rate stability, a must for the achievement of this objective, was seriously compromised in September 1992 when Great Britain and Italy, followed in November by Portugal and Spain, and in January 1993 by Ireland decided to devalue by 10% and more, and in some cases to leave the ERM. Continuous specultative pressure, although not as intensive, was also experienced by France and Denmark during this period.
KeywordsExchange Rate Interest Rate Monetary Policy Fiscal Policy Public Debt
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