Abstract

The European Monetary System (EMS), put in place in 1979, aimed to stabilise exchange rates within the European Economic Community (EEC) after the 1970s crises. On top of linking the currencies of the member states, it introduced the European Currency Unit (ECU), which functioned as a basket currency. Next to the “official” ECU market, which existed only for central banks ensuring the proper functioning of the EMS, a “private” ECU market soon developed, where banks and other enterprises lent, borrowed or issued products denominated in ECU. This private ECU market enjoyed sustained growth all along the 1980s, and by 1991 the ECU was the world's fifth-largest traded currency.
This paper focuses on the role of private enterprises in the making of the private market for ECU. Based on the archives of several banking and industrial companies in Italy, France and the United Kingdom and European business associations, it sheds light on the business network which popularised ECU and on its motivations behind it. On the one hand, ECU provided a shelter against the fluctuation of exchange rates in world currencies and was one of many new financial innovations of the 1980s which were used in the name of economic profit. On the other hand, participating in the ECU private market sent a clear signal of support for European monetary integration. By looking at the use of ECU by private enterprises, the paper explores the relationship between the emergence of the ECU market and the businesses and banks’ support for the looming project of Economic and Monetary Union (EMU). It, therefore, offers an insight into the strong interplay of business and political goals and evidences the role of enterprises in reinventing financial and monetary Europe after the 1970s crises.