Munich Personal RePEc Archive

Spain and EMU

Garcia, Isabella (1997): Spain and EMU. Published in: Review of Financial Economy (1997): pp. 58-75.

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By joining the EMS on 16 June 1989, the peseta became the first currency to join the European exchange rate mechanism created ten years ago. On this tenth anniversary, the EMS, renowned for promoting non-inflationary growth and accelerating economic convergence, was hailed as a great success. However, in the wake of recent currency turbulence, punctuated in particular by three devaluations of the Spanish currency since September 1992, the European exchange rate system is suddenly accused of a variety of evils: slowing growth, anchoring on Germany, hindering Competitiveness - price of several states, etc. Some comments on the functioning of the ECM are as devastating today as they were laudatory at the end of the last decade. This radical change of opinion is an opportunity to take an interest in the particular situation of Spain at a crossroads of European monetary integration. After recalling the situation of the Spanish economy on the eve of its accession to the EMS, we will attempt to draw up an initial assessment of the entry of the peseta into the European exchange rate mechanism.

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