Abstract

The broad criteria outlined at the outset of the paper as guideposts for the choice of a monetary and exchange regime provide an abstract sketch of those aspects of an economy that would ease its integration into a currency area bound together by fixed exchange rates. The experience gathered within the EC in general and the EMS in particular confirms the basic appropriateness of these criteria. The relatively high degree of openness and consequent integration of the markets for goods and services in the economies participating in the system have contributed to the strengthening of the system, as has the growing interaction among their factor, capital, and financial markets.44 In turn, these growing linkages among intra-EMS markets have strengthened policy coordination and convergence of economic performance, which themselves foster the prevalence of common aims, and of similar policy attitudes among the members of the system.