ABSTRACT
The most significant development in the EC during the 1970S and early 1980s was the emergence of European monetary integration. Three decisions were particularly salient: the creation of the European Exchange Rate Agreement or "Snake" in 1973, the making of the European Monetary System (EMS) in 1979 , and the "hardening" of EMS constraints on France between 1982 and 1986 . The Snake and EMS created adjustable peg systems that stabilized exchange rates but functioned in an "asymmetrical" manner by apportioning the costs of domestic macroeconomic adjustment disproportionately to weak-currency countries such as France, Italy, and Britain (which had to tolerate relatively high interest rates and overvalued currencies) rather than to strong-currency countries like Germany. The institutional rules of the EMS were minimal: supranational authorities were weak and financial obligations modest, though a norm emerged that unanimous consent was required for parity changes. Monetary negotiations were linked at times to other issues, induding successful British accession, weak CAP financing and reform, an expansion of regional but marginal social policies, direct elections to the European Parliament beginning in 1979, failed efforts to promote greater qualified majority voting (QMV), and the creation of the European Council, a forum in which EC chief executives hold regular summit meetings.
