EMS

Since its inception, the European Monetary System (EMU) has attracted much attention as a structure that coordinates political relations.

Disappointed by the prospects of the global monetary system with its floating rate, the founding fathers of EBU intended to restore a system of fixed, but regulated exchange rates in most of the European Community. Such a system would protect huge European domestic trade flows from drastic changes in competitiveness. It would also limit the divergence of national inflation rates, allowing for less volatile inflation and leading to a "monetary stability zone".

At the same time, the European Monetary System was assessed as an extremely ambitious project, as it returned to the European currency management some countries, primarily France and Italy, which remained estranged from earlier attempts at unification.

The system subsequently evolved beyond its original objectives: the mechanism for monitoring the exchange rate of the European Economic Community (EEC) has become tougher, the coherence of monetary policy more specifically, the mobility of capital is higher than it was in the early years of EBU development.

Everything in the world is interconnected, especially in the sphere of monetary relations at the global level. Therefore, we should say a few words about the world monetary system as a whole, which has passed several stages of development:

· The Paris currency system (1816-1914), based on the gold coin standard.

· Gold standard (1914-1941), which provided for the exchange of paper money for gold bars weighing not less than 12.5 kilograms.

Along with gold, over time, international dollars began to accept US dollars and pounds sterling.

· In 1922, Genoa hosted a conference that brought together representatives of 34 countries, which discussed aspects of monetarism after the end of World War I, the strategy for the restoration of Central and Eastern Europe, and the agreement between European capitalist economies and the new Soviet regime.

Then the Genoese currency system (1922-1944) was formulated, the basis of which was the gold and currency standard.

· Since the Second World War, attempts have been made to maintain stability among major currencies through a fixed exchange rate system called the Bretton Woods Agreement, which collapsed in the early 1970s.

Nevertheless, European leaders sought the principle of stable courses, refusing the policy of floating rates, popular in the United States.

Most countries agreed in 1972 to maintain currency relations. And the currency system, called "European currency snake", was to prevent fluctuations in rates by more than 2.25 percent.

This was the first attempt at cooperation in the sphere of monetary relations and, in essence, it linked all the EEC currencies with each other. Although the regime more or less existed until 1979, it actually began to fall apart in 1973, due to the free fluctuation of the dollar.

The European Monetary System was established in 1979 in order to stabilize the courses of the economic communities included in the European Union. At the same time, a European monetary unit (ECU), based on a basket of national currencies, appeared. ECU was the predecessor of the Euro.

At the first stages the movement was not completely successful, there were many difficulties of a technical nature. Periodic adjustments have strengthened the value of strong currencies and lowered the weaker ones.

However, since 1986, changes in national interest rates have been used to maintain currencies within a narrow range (from the mutual central rate). Countries participating in the process had to comply with the established unit, which was a decisive contribution to the fight against inflation.

Prior to 1990, the United Kingdom did not join the establishment of the correct exchange rate mechanism (IMC) for all participating states. She was forced to abandon it again in 1992, because she could not stay within the limits of the IMC.

The project, nevertheless, continued to develop in accordance with the Maastricht Treaty, which confirmed the importance of the collective structure.

In 1999, when the Euro appeared, the European Monetary System ended its existence, despite the fact that the mechanism of exchange rates continues to work.