European Monetary System in the context of "European Exchange Rate Mechanism"

⭐ In the context of the European Exchange Rate Mechanism, the European Monetary System is considered…

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⭐ Core Definition: European Monetary System

The European Monetary System (EMS) was a multilateral adjustable exchange rate agreement in which most of the nations of the European Economic Community (EEC) linked their currencies to prevent large fluctuations in relative value. It was initiated in 1979 under then President of the European Commission Roy Jenkins as an agreement among the Member States of the EEC to foster monetary policy co-operation among their Central Banks for the purpose of managing inter-community exchange rates and financing exchange market interventions.

The EMS functioned by adjusting nominal and real exchange rates, thus establishing closer monetary cooperation and creating a zone of monetary stability. As part of the EMS, the EEC established the first European Exchange Rate Mechanism (ERM) which calculated exchange rates for each currency and a European Currency Unit (ECU): an accounting currency unit that was a weighted average of the currencies of the 12 participating states. The ERM let exchange rates to fluctuate within fixed margins, allowing for some variation while limiting economic risks and maintaining liquidity.

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👉 European Monetary System in the context of European Exchange Rate Mechanism

The European Exchange Rate Mechanism (ERM II) is a system introduced by the European Economic Community on 1 January 1999 alongside the introduction of a single currency, the euro (replacing ERM 1 and the euro's predecessor, the ECU) as part of the European Monetary System (EMS), to reduce exchange rate variability and achieve monetary stability in Europe.

Following the adoption of the euro, policy changed to linking currencies of EU countries outside the eurozone to the euro (having the common currency as a central point). The goal was to improve the stability of those currencies, as well as to gain an evaluation mechanism for potential eurozone members. Since January 2023, two currencies participate in ERM II: the Danish krone and the Bulgarian lev. Bulgaria has been officially approved to join the eurozone effective January 2026, which will leave only the Danish krone remaining as part of the ERM II.

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European Monetary System in the context of 1986 French legislative election

Legislative elections were held in France on 16 March 1986 to elect the eighth National Assembly of the Fifth Republic. Contrary to other legislative elections of the Fifth Republic, the electoral system used was that of party-list proportional representation.

Since the 1981 election of François Mitterrand, the Presidential Majority was divided. In March 1983 Prime Minister Pierre Mauroy renounced the left's radical Common Programme which had been agreed in the 1970s. Wages and prices were frozen. This change of economic policy was justified by the will to stay in the European Monetary System. A year later, the Communist ministers refused to remain in Laurent Fabius' cabinet.

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LINKED FROM (PARENTS)
← European Exchange Rate Mechanism ← 1986 French legislative election
LINKS TO (CHILDREN)
European Economic Community → Roy Jenkins → European Currency Unit →