Comparing British and French Policy on European Monetary Integration (1): The Currency Crisis of 1976

Abstract

In March 1979, European monetary cooperation was given new impetus by the establishment of the EMS, which was largely the result of a West German initiative. Having been at first indecisive, the British government now chose not to participate in the ERM, the central institution of the EMS. France, by contrast, opted for full membership, despite misgivings as to the details of the scheme. In this chapter, we will conduct a detailed study of British policy towards European monetary cooperation, from March 1976 until the beginning of the negotiations on the EMS, comparing it with the French case. British and French policy on the establishment of the EMS will be closely looked at in the next chapter. By building on these case studies, we will be able to explain why these two neighbouring countries parted ways on European monetary cooperation.