European Union Exam
- End convertibility of US dollar into gold
- Monetary/political instability
- „Snake in the tunnel“ linked to USD and to DM (UK, DK, IT, FR out)
- Economic disparities among Members (European Regional
Development Fund, 1973)
- European Monetary System
Replaced the „snake“ and was based on the exchange rate mechanism of
the European Currency Unit (ECU). The value of ECU was a basket EC
currencies weighted according to their relative strength. Committment to
keep national currencies within +/-2.25% (6% for Italy) – UK and DE left in
early 1990s.
III loeng
Maastrich Criteria towards a single EU currency
The European Monetary Union (EMU) was decided in Maastricht:
1. Inflation rate (not more than 1.5% points from the best)
2. Annual govt. deficit (3%); Govt. debt (60%)
3. Exchange rate stable
4. Long-term interest rate
Enlargement came with problems
- Old institutional structure designed for 6
annaabi.ee 
