The former monetary system of the European Community (EC) member states (now the European Union-EU) which led to the creation of a zone of currency stability as the forerunner of the single European currency (the Euro or i).
The goal of the EMS was to move Europe toward closer economic integration and avoid the disruptions in trade that resulted from fluctuations in currency exchange rates. The EMS member countries deposited gold and dollar reserves with the European Monetary Cooperation Fund in exchange for the issuance of European Currency Units (ecu).
Established in 1979; all EC (now EU) members except Greece and the United Kingdom participated in the exchange rate mechanism of the EMS. Note that as of January 1, 2002, the ecu has been replaced by the Euro (i).
See European Currency Unit; European Monetary Union; European Community, Euro.