European Monetary System

(EMS). The predecessor in the European Union of Economic and Monetary Union (EMU), which led in turn to the establishment of the euro.

The EMS was designed to create an area of currency stability throughout the European Community by encouraging its member states to co-ordinate their monetary policies.

The EMS used the Exchange Rate Mechanism (ERM) with the aim of stabilising exchange rates and thereby facilitating trade between member states.

See also

• European currency unit
• European Economic and Monetary Union
• Exchange Rate Mechanism
• Parity grid