European Monetary System
European Monetary System (EMS) System set up in 1979 to bring about monetary stability among the then nine members of the European Community (EC). The EMS had three main components: the European Currency Unit (ECU), a monetary unit weighted according to the size of each member state's economy and the value of its trade; the Exchange Rate Mechanism (ERM), where each member state agreed to keep their national currencies within set margins (initially either 2.25% or 6% above or below) of a central rate of exchange against the ECU; and the credit mechanisms. The Maastricht Treaty (1992) set a timetable for achieving economic and monetary union (EMU) and the establishment of a single currency (the euro). In 1998, 11 member states chose to participate in the first stage of EMU. On January 1, 1999, the euro was born and a European Central Bank gained control of a single monetary policy.
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European Monetary System
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European Monetary System