The ECU, the European Currency Unit. The ECU was a basket of the Community’s member states’ currencies, made up by taking into account their GDP and proportion of trade in the Community. The ECU, as the official currency, was introduced on 18 December 1978. It was used only in non–cash (account) transactions up until the introduction of the euro.

The Exchange Rate Mechanism (ERM). The countries taking part in the ERM had to determine and maintain their currency rates within set limits vis–à–vis other currencies. Currency parities, called base currency rates, were determined in relation to the ECU. Parity fluctuation limits were set as well. During the 1992–1993 currency crises, the ERM was weakened and some countries withdrew from the mechanism. Sweden was the only country which never have participated in the ERM.

The European Monetary Cooperation Fund. It was founded in 1973 and was provisional. The central banks of countries that were participating in the ERM had the possibility of automatically getting short term (longest – 9 months) loans of a certain size from other central banks if they needed to intervene in foreign currency markets when their national currency’s exchange rate with the ECU exceeded the set rate. There was also the possibility to take longer term loans, but these needed approval from the Council of Ministers. As far as it is known, no central bank participating in the ERM ever asked for a longer term loan.