Word: floating
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...worth fewer Deutsche marks, and quite likely fewer Dutch guilders, Austrian schillings and Swiss and Belgian francs. At a tense, day-long meeting in Brussels on Saturday, the finance ministers of the six European Common Market nations reluctantly reached a compromise. They authorized member nations to let their currencies "float" -rise or fall in price, depending on supply and demand-within certain limits above or below their stated dollar value. It seemed almost certain that they would promptly rise. This week the West German Cabinet is expected to permit a limited floating of the mark. Belgium, The Netherlands and Austria...
...monetary strategy, however. Schiller seems to have produced greater confusion than ever. Even in the midst of crisis, Germany could not win agreement on a concerted European revaluation. After France and other Common Market countries made clear their opposition to revaluation, Schiller's proposal to let the mark float ran into considerable opposition within his own government. At a four-hour meeting in Chancellor Willy Brandt's house in the Venusberg section of Bonn, Foreign Minister Walter Scheel argued that a floating mark would foul up the Common Market's system of farm price supports, which assumes...
Schiller nevertheless won a consensus for his position, and at the Common Market meeting Saturday urged a concerted float by the six nations. The French resisted, largely out of a desire to preserve the Market's farm price-support system; they echoed Bundesbank President Klasen's argument that exchange controls would be preferable. What finally came out was a compromise: Market nations can float their currencies if they feel it essential. But floaters and nonfloaters should try to preserve the rates at which, say, marks and francs can be exchanged for each other, even as the mark...
Flouting the Rules. The key question for this week is whether this package will even temporarily stop speculation against the dollar, or merely concentrate it in other currencies-the Swiss franc, for example. Swiss officials have said that they will never float their currency, but that if Germany floats the mark the Swiss franc may be formally revalued. Forced floating or revaluation of one currency after another under crisis conditions could generate growing confusion as to what any currency was worth; it could lead, theoretically, to a paralysis of world trade and investment. In any case, last week...
Speculation as to the fate of the dollar was precipitated by West Germany's decision Sunday to permit the mark to float in relation to the dollar-and thus increase in value. Influenced by close trading ties with Germany, the Dutch decided to float the guilder, and the Swiss and Austrians increased the fixed value of their currencies in relation to the dollar...