were abandoned in favour of the euro in January 2002 but could still be exchanged for legal tender.
For the first time Germany--the country that gave up its trusted deutschemark
and independent Bundesbank--was defeated on the most important issue so far before the Council.
By the same token, if the Germans have overthrownthe deutschemark
for a European currency, that also must be to the benefit of the prevailing coalition of interests.
In reality, it's little more than a new name for the Deutschemark
or French franc.
A hard-currency policy centred around a close link with the Deutschemark
has enhanced confidence in the guilder and secured low interest rates.
The world today is dominated by three currencies: the dollar, the deutschemark
, and the yen.
Indeed, during the fixed-rate era, a preponderance of devaluations occurred (only the deutschemark
and Dutch guilder were revalued upwards) and this put pressure on the U.S.
If the dollar falls against the Deutschemark
, its dollar cashflows will be worth fewer Deutschemarks
, but they will not turn negative.
1990 Next general election: October 1994 FOREIGN TRADE Exports: Exports of goods and services as per cent of GDP, 1992 23.7 Main exports, 1992 (per cent of total merchandise exports): Products of agriculture, forestry and fishing 1 Basic materials and semi-finished goods 23 Manufactured foods and tobacco 5 Other consumer manufactures 13 Investment goods 57 Other exports 1 Total 100 Imports: Imports of goods and services as per cent of GDP, 1992 23.9 Main imports, 1992 (per cent of total merchandise imports): Food 11 Raw materials and semi-finished goods 15 Finished goods 73 of which: Primary products 13 End products 60 Other imports 1 Total 100 THE CURRENCY Monetary unit: Deutschemark
Currency units per US$, average of daily figures: Year 1993 1.653 June 1994 1.629 1.
But the link with the Deutschemark
has caused tensions in the context of divergent cyclical positions between Germany and the United Kingdom, which is still Ireland's main trading partner.
Given the firm government commitment of keeping the schilling closely pegged to the Deutschemark
, on the one hand, and the now completed liberalisation of financial markets, on the other hand, policy-controlled interest rates as well as money and capital market rates are bound to follow closely financial developments abroad, particularly those in Germany.
Although the entry rate was still below the average real rate against the Deutschemark
over the previous ten-year period (Diagram 14), sterling had appreciated by 7 per cent on an effective basis and 5 1/2 per cent against the Deutschemark
since the beginning of 1990.