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line with the eight other EMS currencies) London's reputation as Europe's
"odd man out" is growing.
It is too soon to predict the short-term impact of the EMS, and its
clearing-house Euorpean currency unit (ECU), on the U.S. dollar. Some
sources actually think the initial effect may be good, since the goal o�
the EMS is to create more order in monetary markets by creating a "zone
of monetary stability" in Europe.
On the other hand, the EMS set-up shows signs of attracting to its member
states massive shifts out of the dollar, simply becuse the powerful West
German mark will be the king-pin currency behind the ECU, and the EMS
countries will have to adopt more conservative economic and monetary
practices to keep in line with the mark. In this light, Business Week
for February 26, 1979 reports that "in what may be a foretaste of things
to come, investors have already jumped the gun to pour hundreds of
millions of dollars into the Danish bond market."
The impact of the EMS, of course, extends beyond mere money reform.
"The EXS was hatched as much as a political initiative as an economic
one," reports the March 21 Wall Street Journal, adding: "German Chan
cellor Helmut Schmidt and French President Valery Giscard d'Estaing
were its prime backers, supported by Roy Jenkins, the president of the
European Commission, the Common Market's executive body. Mr. Jenkins
hopes the EMS will eventually lead to full economic and monetary unity
for Euorpe, featuring a common European currency and joint economic
planning."
In a recent interview, Mr. Jenkins said: "This is a major step along
the road to economic and monetary union, from which one could make a
choice to go on. It arose from a reawakening of the idea that Europe will
make itself� its money. In that sense it's a strongly integrating
force."
--Gene H. Hogberg, News Bureau