At this point in this work, it is useful to examine the record of the European Monetary System. However, this record should be placed in its proper context. This implies that we are not examining an EMU — but an EMS — which is a kind of de-facto monetary union. Then, it is important to bear in mind the outside pressures — as well as the inside ones — which have been challenges to the System. To the author, basically four main questions should be asked when assessing the record of the EMS. These are:
  1. (i)

    has the System constituted a zone of relative monetary stability?

  2. (ii)

    have adjustments in exchange rates taken place easily and discreetly?

  3. (iii)

    have inflation rates tended to converge among the participating countries?

  4. (iv)

    are participating countries applying rigorous economic and monetary policies which they might not have applied had they not been members of the EMS?



Exchange Rate Member State Inflation Rate Exchange Market Monetary Union 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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NOTES: Part Two

  1. 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. 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. 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. 4.
    This formula was adopted in order to leave the ownership of these reserves in the hands of the Member States.Google Scholar
  5. 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

Copyright information

© P. Coffey, Amsterdam 1984

Authors and Affiliations

  • Peter Coffey
    • 1
  1. 1.European InstituteUniversity of AmsterdamAmsterdamThe Netherlands

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