1979

Creation of the European Monetary System (EMS)

A milestone in the history of European integration, at the instigation of German chancellor H. Schmidt and French president V. Giscard d’Estaing. The European Monetary System was a regime of fixed but adjustable exchange rates, i.e. the bilateral exchange rates between each currency pair could be mod-ified by agreement between member countries. Its objective was to stabilise the exchange rate of European currencies. The EMS implied maintaining bilateral exchange rates (the exchange rate between two currencies) within a maximum fluctuation band of + / - 2.25%. A European unit of account, the ECU (European Currency Unit), representing a basket of European currencies, was created.