The System in Operation
has the System constituted a zone of relative monetary stability?
have adjustments in exchange rates taken place easily and discreetly?
have inflation rates tended to converge among the participating countries?
are participating countries applying rigorous economic and monetary policies which they might not have applied had they not been members of the EMS?
KeywordsExchange Rate Member State Inflation Rate Exchange Market Monetary Union
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NOTES: Part Two
- 1.All the EEC Member States — except Greece and the United Kingdom — participate in the EMS. However, Britain has participated in the “swap” operation — exchanging 20 per cent of its holding of gold and dollars against ECU’s.Google Scholar
- 2.The composition of the ECU, as calculated on 28 June 1974, is as follows: 0.828 Deutsche Mark 0.0885 Pound Sterling 1.15 French Francs 109.00 Italian Lira 0.286 Dutch Guilders 3.66 Belgian Francs 0.14 Luxembourg Francs 0.217 Danish Crown 0.00759 Irish PoundGoogle Scholar
- 3.The new credits are divided as follows: 14 billion ECU’s in short term and 11 billion ECU’s in medium-term credit. A short term credit is available for a maximum period of 9 months and a medium-term one for between 3 and 5 years.Google Scholar
- 4.This formula was adopted in order to leave the ownership of these reserves in the hands of the Member States.Google Scholar
- 5.This situation exists because in 1973, no decision could be made about the location of the final home for this institution — the contestants being Luxembourg and London.Google Scholar