The Common Market Executive Commission met on Saturday night to work out a common European approach to the dollar crisis threatening the stability of Europe's currencies, in particular the German Mark.
The Common Market Executive Commission met on Saturday night to work out a common European approach to the dollar crisis threatening the stability of Europe's currencies, in particular the German Mark. The proposal made was that member states allow their currencies to float, to establish an exchange rate determined by supply and demand. This departure from normal Common Market monetary policy has had quick consequences--West Germany has announced that the Mark will float, Holland has done the same, and both Switzerland and Austria announced on Sunday a revaluation of their currencies. West Germany's decision to float the Mark in answer to the massive influx of dollars into Europe, primarily for the purchase of Marks, met with stiff opposition from other Common Market countries, particularly France. The German Foreign Minister, Walter Scheel, said after the meeting, however, that the differences had been sorted out.
SYNOPSIS: The Common Market Executive Commission met in THE EEC headquarters in Brussels on Saturday to work out a common European approach to the present currency crisis. The crisis began a week ago following a report by several German research institutes suggesting that the German Mark be floated to deal with the massive influx of American dollars. This academic suggestion was in itself enough to spur speculators, and 1,900 million dollars were exchanged for Marks in four days last week. This made floatation or revaluation of the Mark almost inevitable. The meeting was called to find a solution. French monetary policy was against the flotation of currencies. But the Executive, after a discussion lasting 20 hours, decided to propose that the currencies of the Common Market members be allowed to float.
West German Finance Minister Karl Schiller immediately announced that West Germany would float the Mark, and Holland announced on Sunday that she would float the Guilder. Both Switzerland and Austria have since revalued. These steps are against the policy of France, whose monetary policy is directly opposed to these measures. West German Foreign Minister Walter Scheel was asked about this: