ABSTRACT
The Western currency system, which is based on convertibility, and the economic systems of the Council for Mutual Economic Assistance (CMEA) countries, where currencies have a domestic function only, are both in need of reform. The objective of the chapter is to delineate prospects for the expansion of monetary relations between East and West on the basis of an analysis of the monetary and currency problems of the Eastern nations. The Western enterprises in the East are interested primarily in combining cheap Eastern labor with Western know-how. The CMEA monetary system is merely a temporary stage on the way to more advanced monetary and credit relations, with integration of the Eastern currencies into the international monetary system as the ultimate goal. If the Eastern nations had joined the International Monetary Fund or had remained members if they already were so, the international monetary system would have developed along quite different lines.
