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Mr. Peter Nyberg https://isni.org/isni/0000000404811396 International Monetary Fund

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Horst Ungerer https://isni.org/isni/0000000404811396 International Monetary Fund

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Mr. Owen Evens https://isni.org/isni/0000000404811396 International Monetary Fund

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Language:
English
Keywords:
OP; EMS; central bank; EMS currency; EMS Band; exchange rate
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Abstract

This paper is concerned with developments in the European Monetary System (EMS) from its start in March 1979 through December 1982.

Appendix I Statistical Tables

Table 1.

EMS: Periods of Strain1,2

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Source: Fund staff estimates and calculations.

Defined as periods with reports of substantial interference in the exchange market by intervention, capital and exchange controls, or measures of monetary policy motivated by exchange rate developments.

Notation: B—Belgium; BF—Belgian franc; D—Denmark; DKr—Danish krone; F—France; FF—French franc; G—Federal Republic of Germany; DM—deutsche mark; £Ir—Irish pound; I—Italy; Lit—Italian lira; N—Netherlands; f.—Netherlands guilder; U.S.—United States; $—U.S. dollar; CA—current account.

Table 2.

EMS: Bilateral Central Rates1

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Sources: Commission of the European Communities; and Fund staff calculations.

Expressed as the price of 100 units of the currency on top of the column in the currency in front of the row.

Table 3.

EMS Realignments: Percentage Changes in Bilateral Central Rates1

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Sources: Commission of the European Communities; and Fund staff calculations.

Calculated as the percentage change against the group of currencies whose bilateral parities remained unchanged in the realignment, except for the most recent realignment (3/21/83) in which all currencies were realigned—for this the percentages are shown as in the official communique.

Table 4.

EMS: ECU Central Rates1

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Source: Commission of the European Communities.

The change of any central rate expressed in terms of ECUs implies a simultaneous change of all other ECU central rates, since the ECU is made up of a basket of currencies. Positive sign indicates depreciation relative to the ECU.

Table 5.

EMS: Interest Differentials for Three-Month Deposits, 1979–821

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Source: Fund staff calculations.

End of month.

Rates pertain to last Tuesday of the month.

Positive sign indicates differential in favor of Eurodollar investment relative to domestic investment, while negative sign indicates the reverse. Domestic interest rates for France, the Federal Republic of Germany, Italy, and the Netherlands are interbank rates. For Belgium the rate on four month certificates of the Government Securities Stabilization Fund is used.

Covered interest differential is calculated as the uncovered interest differential minus the forward exchange quotation.

Table 6.

EMS: Economic Measures in Connection with Realignments1

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Sources: Commission of the European Communities and Fund staff.

Notation: BF—Belgian franc; DKr—Danish krone; FF—French franc; DM—deutsche mark; £Ir—Irish pound; Lit—Italian lira; Lux F—Luxembourg franc f.—Netherlands guilder.

Table 7.

Variability of Nominal Effective Exchange Rates, 1974–821,2

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Sources: International Monetary Fund, International Financial Statistics; and Fund staff calculations.

Based on the IMF’s multilateral exchange rate model (MERM) and monthly data.

Variability is measured by the coefficient of variation (multiplied by 1,000) of monthly exchange rates.

Unweighted average.

Table 8.

Variability of Nominal Exchange Rates Against EMS Currencies, 1974–821

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Sources: International Monetary Fund, International Financial Statistics; and Fund staff calculations.

Weighted average (MERM weights) of variability of bilateral nominal exchange rate against EMS currencies, with variability measured by coefficient of variation (multiplied by 1,000) of bilateral exchange rates.

Firs t nine months only.

Unweighted average.

Table 9.

Variability of Nominal Exchange Rates Against Non-EMS Currencies, 1974–821

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Sources: International Monetary Fund, International Financial Statistics; and Fund staff calculations.

Weighted average (MERM weights) of variability, measured by coefficient of variation of bilateral nominal exchange rates against the eight non EMS countries listed.

First nine months only.

Unweighted average.

Table 10.

Variability of Bilateral Real Exchange Rates Against EMS Currencies, 1974–821

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Sources: International Monetary Fund, International Financial Statistics; and Fund staff calculations.

Weighted average (MERM weights) of the variability of bilateral real exchange rates (as measured by nominal exchange rates adjusted for relative consumer price movements) against EMS countries, with variability measured by the coefficient of variation (multiplied by 1,000) of the bilateral real exchange rate.

First nine months only.

Unweighted average.

Table 11.

Variability of Bilateral Real Exchange Rates Against Non EMS Currencies, 1974–821

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Sources: International Monetary Fund, International Financial Statistics; and Fund staff calculations.

Weighted average (MERM weights) of variability of bilateral real exchange rates against the above eight non-EMS countries as a group, with variability measured by the coefficient of variation (multiplied by 1,000) of the bilateral real exchange rate.

First nine months only.

Unweighted average.

Table 12.

Consumer Price Indices, 1974–82

(Annual change in percent)

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Sources: International Monetary Fund, International Financial Statistics; and Fund staff estimates.

Compound average growth rates.

Fund staff estimates.

Weighted by real GDP (using 1980 weights in 1981).

Table 13.

GDP Deflators, 1974–81

(Annual change in percent)

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Sources: International Monetary Fund, World Economic Outlook (various issues); and Fund staff calculations.

Compound average growth rates.

Weighted by real GDP (using 1980 weights in 1981).

GNP deflator.

Table 14.

Short-Term Interest Rates, 1974–81

(Monthly averages in percent)

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Source: International Monetary Fund, International Financial Statistics.

Weighted by real GDP (using 1980 weights in 1981).

Table 15.

Long-Term Interest Rates, 1974–81

(Monthly averages in percent)

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Source: International Monetary Fund, International Financial Statistics.

Weighted by real GDP (using 1980 weights in 1981).

Table 16.

Matrix of Correlation Coefficients Between Long-Term Interest Rates, March 1976-March 1979 and April 1979-March 19821

(Monthly averages)

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Sources: International Monetary Fund, International Financial Statistics; and Fund staff estimates.

Line 1 shows the correlation coefficient for the period March 1976 to March 1979 and line 2, the correlation coefficient for the period April 1979 to March 1982.

Table 17.

Matrix of Correlation Coefficients Between Short-Term Interest Rates, March 1976-March 1979 and April 1979-March 19821

(Monthly averages)

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Sources: International Monetary Fund, International Financial Statistics; and Fund staff estimates.

For every country, line 1 indicates the correlation coefficient for the three-year period (March 1976-March 1979) prior to the introduction of the EMS and line 2 indicates the correlation coefficient for the three-year period from April 1979 to March 1982.

Table 18.

Rate of Growth of Narrow Money, 1974–81

(Annual change in percent)

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Source: International Monetary Fund, International Financial Statistics.

Compound average growth rates.

Table 19.

Rate of Growth of Broad Money, 1974–811,2

(Annual change in percent)

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Source: International Monetary Fund, International Financial Statistics.

Broad money (M2) defined as money and quasi-money.

End-of-year data.

Compound average growth rates.

Weighted by the broad money stock in the previous year converted into dollars using the average dollar exchange rate.

Table 20.

Rate of Growth of Domestic Credit, 1974–81

(Annual change in percent)

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Source: International Monetary Fund, International Financial Statistics.

Compound average growth rates.

Table 21.

Real Narrow Money Stock, 1974–811

(Annual change in percent)

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Source: Tables 12 and 18.

Deflated by the consumer price index.

Table 22.

Real Broad Money Stock, 1974–811

(Annual change in percent)

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Source: Tables 12 and 19.

Deflated by the consumer price index.

Table 23.

Real Domestic Credit, 1974–811

(Annual change in percent)

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Source: Tables 12 and 20.

Deflated by the consumer price index.

Compound average growth rates.

Table 24.

Central Government Budget Deficit as a Ratio to Nominal GDP, 1974–81

(In percent)

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Sources: International Monetary Fund, International Financial Statistics; and national authorities.

Weighted by real GDP in the current year (using 1980 weights in 1981).

Table 25.

Budget Deficits and Changes in Money Supply, 1974–811

(In percent)

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Source: European Economy, No. 12 (July 1982), p. 28.

General government borrowing requirement (+) or financial surplus (—) divided by the increase in broad money supply.

Table 26.

Balance of Payments Current Account, 1974–81

(In billions of U.S. dollars)

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Source: International Monetary Fund, International Financial Statistics.
Table 27.

The Creation of ECUs by Swap Operations, April 1979-December 1982

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Source: Commission of the European Communities.

The Bank of England transferred 20 percent of its gold and U.S. dollar reserves from July 1979. The Bank of Greece has made no transfer.

Table 28.

Real Rates of Growth of Gross Domestic Product, 1974–81

(Annual change in percent)

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Sources: International Monetary Fund, World Economic Outlook (various issues) and Fund staff calculations.

Compound average growth rate.

Weighted by the real GDP in the previous year, converted into U.S. dollars using the dollar exchange rate of 1975.

Rate of growth of real GNP.

Table 29.

Gross Fixed Capital Formation, 1974–81

(In percent of GDP)

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Source: International Monetary Fund, International Financial Statistics.

Weighted by real GDP (using 1980 weights in 1981).

Appendix II Bibliography

International Monetary Fund

  • Annual Report of the Executive Board (various issues).

  • Annual Report on Exchange Arrangements and Exchange Restrictions (various issues).

  • IMF Survey, Vol. 7 (December 13, 1978), pp. 369, 376–77, 378–79; Vol. 8 (March 19, 1979), pp. 81, 93; and Supplement: The European Monetary System, pp. 97–100; (June 18, 1979), p. 186; Vol. 10 (April 6, 1981), p. 111; (December 14, 1981), p. 385; Vol. 11 (March 8, 1982), p. 76; (June 21, 1982), pp. 188–89; (July 5, 1982), p. 206; Vol. 12 (April 4, 1983), pp. 97, 103.

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  • World Economic Outlook: A Survey by the Staff of the International Monetary Fund (Washington, May 1980).

  • World Economic Outlook: A Survey by the Staff of the International Monetary Fund, Occasional Paper No. 4 (Washington, June 1981).

  • World Economic Outlook: A Survey by the Staff of the International Monetary Fund, Occasional Paper No. 9 (Washington, April 1982).

European Communities

Treaties Establishing the European Communities: Treaties Amending These Treaties; Documents Concerning the Accession (Luxembourg, 1973).

Commission

  • “Annual Economic Review 1980–81,” European Economy, No. 7 (November 1980), pp. 29–129.

  • “Annual Economic Review 1982–83,” European Economy, No. 14 (November 1982), pp. 33–148.

  • “The European Monetary System–Commentary, Documents,” European Economy, No. 3 (July 1979), pp. 63–111.

  • “European Monetary System: The First Six Months,” European Economy, No. 4 (November 1979), pp. 79–81.

  • “The European Monetary System and Monetary Policy in the European Community,” European Economy, No. 10 (November 1981), pp. 72–92.

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  • “Documents Relating to the European Monetary System,” European Economy, No. 12 (July 1982).

  • Jenkins, Roy, “Europe’s Present Challenge and Future Opportunity,” speech delivered in Florence, October 27, 1977.

  • Jenkins, Roy, “The European Monetary System: Recent Experience and Future Prospects,” speech delivered in Rome, October 1980.

Monetary Committee

Monetary Committee, Compendium of Community Monetary Texts, 1979 (Luxembourg, 1979).

Official Journal

Official Journal of the European Communities: Information and Notices, C 124, Vol. 24 (May 25, 1981).

National Authorities

  • Bank of England, “Intervention Arrangements in the European Monetary System,” Quarterly Review, Vol. 19 (June 1979), pp. 190–94.

  • Banque de France, “Le Système Monétaire Européen,” Service de l’Information (May 1979), pp. 1–15.

  • Banque Nationale de Belgique, “Le Système Monétaire Européen,” Bulletin (July–August, 1979).

  • Central Bank of Ireland, “A Guide to the Arithmetic of the EMS Exchange–Rate Mechanism,” Quarterly Bulletin (Autumn 1979), pp. 76–100.

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  • Deutsche Bundesbank, “The European Monetary System: Structure and Operation,” Monthly Report of the Deutsche Bundesbank, Vol. 31 (March 1979), pp. 11–18.

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  • France, Ministere de l’Economie, “Le Système Monétaire Européen,” Service de l’Information (April 1979).

  • United Kingdom, Chancellor of the Exchequer, The European Monetary System, Presented to Parliament by the Chancellor of the Exchequer by command of Her Majesty, November 1978 (London, H.M. Stationery Office, 1978), Command Paper No. 7405.

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Selected Other Publications

  • Abraham, Jean-Paul and Michel Vanden Abeele, eds., Système monétaire européen et réforme monétaire mondiale: European Monetary System and International Monetary Reform (Editions de l’Université de Bruxelles, 1981).

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  • Banca Nazionale del Lavoro, “The European Monetary System: The First Two Years,” Quarterly Review, Vol. 34 (September 1981), pp. 261–370. Proceedings of the Fourth International Seminar on European Economic and Monetary Union, held at Danmarks Nationalbank, Copenhagen, March 13–14, 1981.

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  • Baquiast, Henri, “The European Monetary System and International Monetary Relations” (with comments by Robert Solomon) in The European Monetary System: Its Promise and Prospects, Papers Prepared for a Conference held at the Brookings Institution in April 1979, ed. by Philip H. Trezise (The Brookings Institution, Washington, 1979), pp. 49–59.

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  • Cohen, Benjamin J., The European Monetary System: An Outsider’s View, Essays in International Finance, No. 142, International Finance Section, Princeton University (1981).

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  • de Vries, Tom, On the Meaning and Future of the European Monetary System, Essays in International Finance, No. 138, International Finance Section, Princeton University (1980).

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  • Dennis, Geoffrey E.J., “United Kingdom’s Monetary Independence and Membership of the European Monetary System,” in Système monétaire européen et réforme monétaire mondiale: European Monetary System and International Monetary Reform, ed. by Jean-Paul Abraham and Michel Vanden Abeele (Editions de l’Université de Bruxelles, 1981), pp. 139–56.

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  • Emerson, Michael, “European Dimensions in the Problems of Adjustment,” Système monétaire européen et réforme monétaire mondiale: European Monetary System and International Monetary Reform (Editions de l’Université de Bruxelles, 1981), pp. 107–38.

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  • Gold, Joseph, SDRs, Currencies, and Gold—Fourth Survey of New Legal Developments, Pamphlet Series, No. 33, International Monetary Fund (Washington, 1980), pp. 46–64.

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  • Haberer, Jean-Yves, “Les problèmes de l’identité monétaire Européenne,” La Revue des Deux Mondes (March 1981).

  • Kloten, Norbert, “Zur ‘Endphase’ des Europäischen Währungssy stems,” Internationale Anpassungsprozesse, Schriften des Vereins fur Socialpolitik, Neue Folge Band 114 (1981).

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  • Ludlow, Peter, The Making of the European Monetary System: A Case Study of the Politics of the European Community, Butterworth Scientific (London, 1982).

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  • McCarthy, Colin, “EMS and the End of Ireland’s Sterling Link,” Lloyds Bank Review No. 136 (April 1980), pp. 30–42.

  • McMahon, Christopher, “The Long–Run Implications of the European Monetary System” (with comments by William J. Fellner) in The European Monetary System: Its Promise and Prospects, Papers Prepared for a Conference held at the Brookings Institution in April 1979, ed. by Philip H. Trezise (The Brookings Institution, Washington, 1979), pp. 81–96.

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  • Marsh, David, “Sterling and the European Monetary System,” The Banker, Vol. 129 (September 1979), pp. 41–43.

  • Masera, Rainer S. “The Operation of the EMS: A European View,” Economia Internationale (November 1979).

  • Masera, Rainer S., “The First Two Years of the EMS: The Exchange–Rate Experience,” in “The European Monetary System: The First Two Years,” Banca Nazionale del Lavoro, Quarterly Review, Vol. 34 (September 1981), pp. 271–86.

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  • Murray, C.H., “The European Monetary System–Implications for Ireland,” Central Bank of Ireland, Annual Report, 1979.

  • Ortoli, François–Xavier, “The European Community Looks at Monetary Integration,” Deutsche Bundesbank, Auszüge aus Presseartikeln, No. 15 (February 26, 1979), pp. 3–5.

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  • Padoa-Schioppa, Tommaso, “The EMF: Topics for Discussion,” Proceedings of the Second International Seminar on European Economic and Monetary Union, Geneva, December 7–8, 1979, Banca Nazionale del Lavoro, Quarterly Review, Vol. 33 (September 1980), pp. 317–43.

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  • Polak, J.J., “The EMF: External Relations,” Proceedings of the Second International Seminar on European Economic and Monetary Union, Geneva, December 7–8, 1979, Banca Nazionale del Lavoro, Quarterly Review, Vol. 33 (September 1980), pp. 359–72.

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  • Rey, Jean–Jacques, “Les Techniques du Système Monétaire Européen,” Aussenwirtschaft, Vol. 34 (June 1979), pp. 158–64.

  • Rey, Jean–Jacques, “Some Comments on the Merits and Limits of the Indicator of Divergence of the European Monetary System,” Revue de la Banque, No. 1 (1982), pp. 3–15.

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  • Rieke, Wolfgang, “Das Europäische Währungssystem,” Deutsche Bundesbank, Auszüge aus Presseartikeln (March 17, 1980).

  • Salop, Joanne, “The Divergence Indicator: A Technical Note,” International Monetary Fund, Staff Papers, Vol. 28 (December 1981), pp. 682–97.

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  • Schlüter, Peter–W., “Die ECU und der Europäische Wahrungsfonds,” Integration 2/82 (April 1982), pp. 54–73.

  • Scholl, Franz, “Praktische Erfahrungen mit dem Europälischen Währungssystem,” Probleme der Währungspolitik, Schriften des Vereins für Socialpolitik, Neue Folge Band 120, 1981, pp. 151–71.

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  • Solomon, Robert, “An American View of the EMS,” Deutsche Bundesbank, Auszüge aus Presseartikeln, No. 15 (February 26, 1979), pp. 6–7.

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  • Thygesen, Niels, “The Emerging European Monetary System: Precursors, First Steps and Policy Options,” in “EMS: The Emerging European Monetary System,” Papers and Proceedings of the First International Seminar on the EMS held at Louvain-la-Neuve, March 24–25, 1979, by John Williamson, Alexandre Lamfalussy, Niels Thygesen, et.al. Ed. by Robert Triffin. Bulletin de la Banque Nationale de Belgique (April 1979), pp. 87–125.

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  • Thygesen, Niels, “Are Monetary Policies and Performances Converging?” (with a comment by Wolfgang Rieke) in “The European Monetary System: The First Two Years,” Banca Nazionale del Lavoro, Quarterly Review, Vol. 34 (September 1981), pp. 297–326.

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  • Trezise, Philip H., ed., The European Monetary System: Its Promise and Prospects, Papers Prepared for a Conference held at the Brookings Institution in April 1979, (The Brookings Institution, Washington, 1979).

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  • Triffin, Robert, “The European Monetary System and How it Fits into the International Monetary System,” Economia, Vol. 3 (Lisbon, October 1979), pp. 537–61.

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  • Ungerer, Horst, “The European Monetary System,” International Monetary Fund, IMF Survey, Supplement (March 19, 1979), pp. 97–100.

  • U.S. Congress, Joint Economic Committee and Committee on Banking, Finance, and Urban Affairs, The European Monetary System: Problems and Prospects, 96th Congress, 1st Session (Washington, Government Printing Office, 1979).

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  • van Ypersele de Strihou, Jacques, “The Future of the European Monetary System,” Revue de la Banque, No. 2 (1981), pp. 179–95.

  • Vaubel, Roland, “The Return to the New European Monetary System: Objectives, Incentives, Perspectives,” Monetary Institutions and the Policy Process, Carnegie–Rochester Conference Series on Public Policy, Vol. 13 (Autumn, 1980), pp. 173–221.

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  • Werner, Pierre, “Du Plan Werner au système monétaire européen,” Bulletin de documentation, Service Information et Presse, Luxembourg (March 1980), pp. 1–7.

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  • Williamson, John, Alexandre Lamfalussy, Niels Thygesen, et. al., “EMS: The Emerging European Monetary System,” Papers and Proceedings of the First International Seminar on the EMS held at Louvain-la-Neuve, March 24–25, 1979. Ed. by Robert Triffin. Bulletin de la Banque Nationale de Belgique (April 1979), pp. 3–186.

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1

In 1978, the members of the European Community were Belgium, Denmark, France, the Federal Republic of Germany, Ireland, Italy, Luxembourg, the Netherlands, and the United Kingdom. Greece became a member on January 1, 1981.

2

Relevant documents concerning the EMS have been published by the Commission of the European Communities in: European Economy, No. 3 (July 1979). (Hereinafter referred to as European Economy, with relevant issue number and date.) For the Resolution see also International Monetary Fund, IMF Survey, December 13, 1978, pp. 376–77.

3

See European Economy, No. 3 (July 1979), p. 94.

4

For details, see International Monetary Fund, IMF Survey, March 19, 1979, Supplement: The European Monetary System, pp. 97–100. Additional literature is listed in the bibliography.

5

Throughout the paper, the terms “participating countries,” “participating currencies,” “EMS countries,” or “EMS currencies” refer to those EC countries or to those currencies of the central banks which are participating in the exchange rate mechanism of the EMS, thus excluding the pound sterling.

6

ECU 1 = US$0.97 on December 30, 1982.

7

The United Kingdom, although not a participant in the exchange rate mechanism, in July 1979 decided to voluntarily contribute 20 percent of its gold and U.S. dollar reserves to the EMCF against ECUs.

8

European Council Resolution of December 5, 1978, paragraph A.3.2. See European Economy, No. 3 (July 1979), p. 95.

9

It should be noted, however, that in an integrated system of a limited number of exchange rates, all participating currencies are affected by action on one or more exchange rates. This is clearly shown by the fact that the adjustment of any number of ECU central rates of EMS currencies leads to simultaneous changes in the ECU central rates of all EMS currencies.

10

It should be kept in mind, however, that the weaker currencies left the “snake” at various times and subsequently depreciated significantly.

11

Chart 1 depicts the history of the ECU/dollar rate, and Chart 2 illustrates the positions of the member currencies within the EMS band. Chart 3 shows the ECU exchange rates of the participating currencies.

12

Detailed information on all the realignments is provided in Tables 3–6. Tables 3–5 provide information on market rates and their changes, and Table 6 outlines policy measures taken in connection with realignments.

13

The agreement setting up the Belgian–Luxembourg Economic Union (BLEU) entered into force on May 1, 1922 and includes a special protocol providing for a monetary association between the two countries. In accordance with a Luxembourg decree, the Luxembourg franc is at par with the Belgian franc.

14

In Chart 4 and Table 7, variability is measured by 1,000 times the coefficient of variation of the nominal effective exchange rate (monthly data).

15

If the indirect effects of EMS exchange rates on third currencies also in the baskets were taken into account, these shares would be even higher.

16

In a way, the behavior of real exchange rates is not relevant here since the stabilizing effect of a system with fixed exchange rates affects in the short run only nominal exchange rates. On the other hand, developments of real exchange rates reveal whether divergencies between exchange rates and cost and price developments arise or whether such divergencies have been compensated for by changes in central rates. Hence, developments in real exchange rates can be seen as composite indicators for the stability of nominal exchange rates and the achievement of convergence in cost and price developments.

17

The Commission of the European Communities introduced a useful distinction between “convergence of nominal variables,” such as costs and prices, and “convergence of real variables,” such as living standards and quality of life. See European Economy, No. 12 (July 1982), p. 14. This publication contains many documents and technical studies relating to the EMS.

18

European Communities, Treaties Establishing the European Communities: Treaties Amending These Treaties; Documents Concerning the Accession (Luxembourg, 1973), p. 173.

19

See December 5, 1978 Resolution of the European Council, Section B in European Economy, No. 3 (July 1979), p. 97.

20

See December 5, 1978 Resolution in European Economy, No. 3 (July 1979), p. 95.

21

See, for example, “Conclusions of the Presidency” of the European Council Meeting in Luxembourg, April 27–28, 1980, in: Bulletin of the European Communities, No. 4 (1980), p. 10; European Economy, No. 12 (July 1982), pp. 14, 40, and 42; and European Economy, No. 14 (November 1982), p. 94.

22

See, for example, European Economy (July 1982), “Part One Economic Convergence and the European Monetary System,” Michael Emerson, “European Dimensions in the Problems of Adjustment,” European Monetary System and International Monetary Reform, Editions de l’Université de Bruxelles (Brussels, 1981), pp. 107–38, and Niels Thygesen, “Are Monetary Policies and Performances Converging?” (with a comment by Wolfgang Rieke) in “The European Monetary System: The First Two Years,” Banca Nationale del Lavoro, Quarterly Review (September 1981), pp. 297–326.

23

Because annual expansion rates have continued to fluctuate widely for individual countries, average annual dispersion measures, nevertheless, remain high.

24

For details see International Monetary Fund, IMF Survey (March 19, 1979), Supplement: The European Monetary System, p. 98. For further literature on the functioning of the divergence indicator, see bibliography, in particular, Jean–Jacques Rey, “Some Comments on the Merits and Limits of the Indicator of Divergence of the European Monetary System,” Revue de la Banque, No. 1 (1982), pp. 3–15 and Joanne Salop, “The Divergence Indicator: A Technical Note,” International Monetary Fund, Staff Papers, Vol. 28 (December 1981), pp. 682–97.

25

European Economy, No. 12 (July 1982), p. 44.

26

On December 30, 1982, equivalent to SDR 5.25 billion.

27

European Economy, No. 3 (July 1979), p. 95.

28

Ibid.

29

For the full text of the proposals, see European Economy, No. 12 (July 1982), Annex D, pp. 88–91.

30

European Economy, No. 3 (July 1979), p. 96.

31

European Communities, Treaties Establishing the European Communities: Treaties Amending These Treaties; Documents Concerning the Accession (Luxembourg, 1973), p. 173.

32

European Economy, No. 12 (July 1982), pp. 35–36.

33

Article IV, Section 3(b), Articles of Agreement of the International Monetary Fund (Washington, D.C., 1978).

34

As mentioned earlier, the short–term monetary support and the medium–term financial assistance facilities, as well as the Community loan mechanism, can be used not only by those countries who actively participate in the EMS but also by the other EC member countries that is, Greece and the United Kingdom.

35

Decision No. 6056–(79/38), March 2, 1979, Selected Decisions of the International Monetary Fund and Selected Documents, Ninth Issue (Washington, June 15, 1981), p. 20.

36

The Twenty–Second Report on the Activities of the Monetary Committee, Official Journal of the European Communities, C 124, Vol. 24 (May 25, 1981), p. 14.

37

Ibid., pp. 12–19.

38

A monthly publication of the International Monetary Fund.

*

Out of print

Occasional Papers of the International Monetary Fund

*1. International Capital Markets: Recent Developments and Short–Term Prospects, by a Staff Team Headed by R.C. Williams, Exchange and Trade Relations Department. 1980.

2. Economic Stabilization and Growth in Portugal, by Hans O. Schmitt. 1981.

*3. External Indebtedness of Developing Countries, by a Staff Team Headed by Bahram Nowzad and Richard C. Williams. 1981.

*4. World Economic Outlook: A Survey by the Staff of the International Monetary Fund. 1981.

5. Trade Policy Developments in Industrial Countries, by S.J. Anjaria, Z. Iqbal, L.L. Perez, and W.S. Tseng. 1981.

6. The Multilateral System of Payments: Keynes, Convertibility, and the International Monetary Fund’s Articles of Agreement, by Joseph Gold. 1981.

7. International Capital Markets: Recent Developments and Short–Term Prospects, 1981, by a Staff Team Headed by Richard C. Williams, with G.G. Johnson. 1981.

8. Taxation in Sub–Saharan Africa. Part I: Tax Policy and Administration in Sub–Saharan Africa, by Carlos A. Aguirre, Peter S. Griffith, and M. Zühtü Yücelik. Part II: A Statistical Evaluation of Taxation in Sub–Saharan Africa, by Vito Tanzi. 1981.

9. World Economic Outlook: A Survey by the Staff of the International Monetary Fund. 1982.

10. International Comparisons of Government Expenditure, by Alan A. Tait and Peter S. Heller. 1982.

11. Payments Arrangements and the Expansion of Trade in Eastern and Southern Africa, by Shailendra J. Anjaria, Sena Eken, and John F. Laker. 1982.

12. Effects of Slowdown in Industrial Countries on Growth in Non–Oil Developing Countries, by Morris Goldstein and Mohsin S. Khan. 1982.

13. Currency Convertibility in the Economic Community of West African States, by John B. McLenaghan, Saleh M. Nsouli, and Klaus–Walter Riechel. 1982.

14. International Capital Markets: Developments and Prospects, 1982, by a Staff Team Headed by Richard C. Williams, with G.G. Johnson. 1982.

15. Hungary: An Economic Survey, by a Staff Team Headed by Patrick de Fontenay. 1982.

16. Developments in International Trade Policy, by S.J. Anjaria, Z. Iqbal, N. Kirmani, and L.L. Perez. 1982.

17. Aspects of the International Banking Safety Net, by G.G. Johnson, with Richard K. Abrams. 1983.

18. Oil Exporters’ Economic Development in an Interdependent World, by Jahangir Amuzegar. 1983.

19. The European Monetary System: The Experience, 1979–82, by Horst Ungerer, with Owen Evans and Peter Nyberg. 1983.

20. Alternatives to the Central Bank in the Developing World, by Charles Collyns. 1983.

21. World Economic Outlook: A Survey by the Staff of the International Monetary Fund. 1983.

22. Interest Rate Policies in Developing Countries, by the Research Department of the International Monetary Fund. 1983.

23. International Capital Markets: Developments and Prospects, 1983, by Richard Williams, Peter Keller, John Lipsky, and Donald Mathieson. 1983.

24. Government Employment and Pay: Some International Comparisons, by Peter S. Heller and Alan A. Tait. 1983. Revised 1984.

25. Recent Multilateral Debt Restructurings with Official and Bank Creditors, by a Staff Team Headed by E. Brau and R.C. Williams, with P.M. Keller and M. Nowak. 1983.

26. The Fund, Commercial Banks, and Member Countries, by Paul Mentre. 1984.

27. World Economic Outlook: A Survey by the Staff of the International Monetary Fund. 1984.

International Monetary Fund, Washington, D.C. 20431, U.S.A.

Telephone number 202 473 7430

Cable address: Interfund

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Cover The European Monetary System
The European Monetary System
The Experience, 1979-82
ISBN:
9781557750631
ISSN:
0251-6365
Publication Date:
16 May 1983
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781557750631.084
Pages:
46

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  • Cohen, Benjamin J., The European Monetary System: An Outsider’s View, Essays in International Finance, No. 142, International Finance Section, Princeton University (1981).

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  • Emerson, Michael, “European Dimensions in the Problems of Adjustment,” Système monétaire européen et réforme monétaire mondiale: European Monetary System and International Monetary Reform (Editions de l’Université de Bruxelles, 1981), pp. 107–38.

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  • Rieke, Wolfgang, “Das Europäische Währungssystem,” Deutsche Bundesbank, Auszüge aus Presseartikeln (March 17, 1980).

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