The European Monetary Union (EMU) The road to EMUEMU is the latest step on the road towards greater integration in Europe.
Monetary union in the European Community (EC) was proposed as long ago as 1970 in the Werner Report, which envisaged it being in place by 1980. The road to EMUHowever, two key developments in the international sphere derailed this first attempt:
1. The breakdown of the Bretton Woods system of fixed exchange rates in August 1971, and
2. The 1973 oil crisis. The road to EMUThe first attempt by the EC to deal with the exchange rate turbulence that followed both of these events, the so-called “snake,” rapidly collapsed to an arrangement involving only a few of the Member States.Upper limit
Lower limit The road to EMUThe second attempt, the European Monetary System* (EMS), created in 1979, proved more durable, although it too was accompanied by a number of major and minor crises.
* Main elements: Exchange Rate Mechanism + ECU ...