International monetary relations between the United States, France, and West Germany in the 1970s
France and Germany attempted, with limited success, to influence U.S. monetary policy through bilateral diplomacy during years of exchange rate fluctuations, dollar devaluations, oil shocks, and payments deficits. Finally, President Valery Giscard d'Estaing and Chancellor Helmut Schmidt created the European Monetary System (EMS) in 1979, reversing the trend of half-hearted attempts at European integration so relevant the decade before. The EMS detached the EC's currencies from the dollar's control, was compatible with the reformed international monetary system, advanced a more independent European monetary identity, and formed the base for future monetary integration. As a result, the EMS, as the birthplace of the Euro, the single European currency launched in 2002, may soon rival the dollar's position as the primary reserve currency.
American monetary policies designed to improve the health of the dollar during the 1970s were a catalyst for European integration. However, as the European Union deepens its economic integration and the Euro grows in strength, it seems that U.S. policies created a regime and a currency that will challenge its dominant position in international monetary affairs.
Advisor:Brands, H. W., Jr.; Mintz, Alex; Bouton, Cynthia A.; Wildenthal, Lora; Mahajan, Arvind
School:Texas A&M University
School Location:USA - Texas
Source Type:Master's Thesis
Keywords:monetary foreign relations bretton woods european system
Date of Publication:08/01/2003