Summary of The EMS Crisis of the 1990s

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While its dramatic crisis is long past, the euro zone has yet to return to healthy growth. It’s enough to make you feel nostalgic for the days of the deutsche mark, the lira and the peseta. Yet the 1990s European Monetary System (EMS) crisis offers interesting parallels with current issues and points to valuable lessons for EU policy makers today. getAbstract recommends this thoughtful reminder of how the more things change, the more they stay the same.

In this summary, you will learn

  • Why the European Monetary System (EMS) collapsed in turmoil in the 1990s,
  • Why the European Monetary Union failed to prevent another crisis, and
  • What policy makers should learn from the EMS and the euro disasters.

About the Author

Daniel Gros is the director of the Centre for European Policy Studies in Brussels.



In the 1990s, European monetary integration suffered a serious setback when speculative attacks on currencies within the European Monetary System (EMS) led to its demise. Though the EMS’s successor, the Economic and Monetary Union (EMU), strove to fix the EMS’s major flaws, the euro crisis nevertheless parallels the EMS debacle of 1992-1995.

The EMS began in 1979 to provide “a zone of monetary stability in Europe.” European currencies traded within “fixed but adjustable” bands, requiring national central banks to intervene if needed to support their currencies. By 1992, despite significant moves toward free capital movement within...

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