The European Currency Unit: An Economical, Financial, and Political Currency.

Intended to provide a basic understanding of the history and complexity of a relatively new foreign currency measure, this paper briefly describes the history leading to the formation of the European Economic Community (EEC), its objectives, its governance structure, and its development of the European Currency Unit (ECU) as a means of stabilizing Europe's monetary system and strengthening the ties of the EEC's 11 member nations. Described as an intangible, cashless currency much like automated bank transfers, the value of an ECU is based on an average of all participating currencies. Should the ECU become independent of the fluctuating U.S. dollar, it could become a major currency of both account and settlement, creating a regional currenty in Western Europe. The recent decisions of Spain and Portugal to join the EEC (often referred to as the Common Market) have enlarged the community market, but the implications of the ECU for Americans in the financial and business community remain to be determined.