ABSTRACT
The international monetary system is the glue that binds national economies together it is impossible to understand the operation of the international economy without also understanding its monetary system. The 2008 financial crisis is a prime example of how international monetary and financial transactions can reshape the global economy. Four regimes have provided a degree of governance in international monetary relations: the classical gold standard from the 1870s to World War I, a gold exchange standard during the first part of the interwar period, the Bretton Woods system from 1944 to 1973, and a mixed system of floating and fixed exchange rates from 1973 to the present. This chapter discusses European monetary relations and it examines the European Union (EU) as a regional trade agreement. To reflect a name change in the EU, we use the term European Community (EC) when discussing the events from 1957 to 1992 and the term EU when discussing events from 1993 to the present.
