Building the Community (1958-95) - Exploring monetary Union (1969-92)
7 important questions on Building the Community (1958-95) - Exploring monetary Union (1969-92)
What is the economic and monetary union?
Why did the US withdraw from the Bretton Woods system?
The high oil prices caused by the Yom Kippur War between Isreal and the Arabs
How did the EEC negotiate monetary policy in the seventies?
1979 replaced by European Monetary System (EMS)
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What was the European Monetary Sytem?`
- Ecu value determined by a basket of the EEC’s national currencies, each weighted according to their national strengths
- Participants had to keep their currency within 2,25% either way of the ecu
Why was the EMS created?
- Hoped that the ecu would become normal means for settling debts between EEC members
o Would psychologically prepare Europeans for single currency
Why did the Commission want the EMU
- Allowing the EEC to take a stronger role in the international economy
Why did Germany and Britain found it difficult to control their exchange rates?
- - German reunification
- - Britain found the demands of the ERM too much tp beat
- Delayed joining until 1990, when inflation and interest rates were high, and its efforts to keep the pound stable was undermined by speculation on international currency markets
- Black Wednesday 16 September 1992 -> Britain withdrew from the ERM
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