The European Payments Union (EPU) was an organization in existence from July 1950 to December 1958, when it was replaced by the
European Monetary Agreement.
With the
end of World War II, economic depression struck
Europe
Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a subcontinent of Eurasia and it is located entirel ...
. Of all the non-neutral powers, only the
GDP
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
of the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...
had not decreased because of the war,
West Germany
West Germany is the colloquial term used to indicate the Federal Republic of Germany (FRG; german: Bundesrepublik Deutschland , BRD) between its formation on 23 May 1949 and the German reunification through the accession of East Germany on 3 O ...
's GDP was at its 1908 level and
France
France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of overseas regions and territories in the Americas and the Atlantic, Pacific and Indian Oceans. Its metropolitan area ...
's at its 1891 level. Trade was based on
US dollar
The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...
reserves (the only acceptable
reserve currency), which Europe lacked. Therefore, the transfer of money (immediately after each transaction) increased the
opportunity cost of trading. Some trade was reduced to
barter
In trade, barter (derived from ''baretor'') is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. Economists disti ...
. The situation led the
Organisation for European Economic Co-operation
The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
(OEEC) to create the EPU, all members signing the agreement on 1 July 1950. The EPU accounted for trades but did not transfer money until the end of the month. It changed the landscape from bilateral trades of necessity (trading with partners because of outstanding debts) to multilateral trades. The EPU also forced liberalization by mandating that members eliminate discriminatory trade measures. The EPU was a general success with trade levels more than doubling during its existence. By its close in 1958, convertibility of currency was a possibility, no longer needing government permissions in European countries.
See also
*
European Unit of Account The European Unit of Account (EUA) was a unit of account most notably used in the European Communities from 1975 to 1979, when it was replaced at parity by the European Currency Unit, in turn replaced at parity in 1999 by the euro.
The EUA was intr ...
*
Bretton Woods system
*
Marshall Plan
The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative enacted in 1948 to provide foreign aid to Western Europe. The United States transferred over $13 billion (equivalent of about $ in ) in economic re ...
*
Asian Clearing Union
The Asian Clearing Union (ACU) was established on December 9, 1974, at the initiative of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). The primary objective of ACU, at the time of its establishment, was to se ...
*
European Payments Council
The Single Euro Payments Area (SEPA) is a payment-integration initiative of the European Union for simplification of bank transfers denominated in euro. , there were 36 members in SEPA, consisting of the 27 member states of the European Union ...
*
European System of Central Banks
The European System of Central Banks (ESCB) is an institution that comprises the European Central Bank (ECB) and the national central banks (NCBs) of all 27 member states of the European Union (EU). Its objective is to ensure price stability t ...
*
International Clearing Union
The International Clearing Union (ICU) was one of the institutions proposed to be set up at the 1944 United Nations Monetary and Financial Conference at Bretton Woods, New Hampshire, in the United States, by British economist John Maynard Keynes. ...
References
* Baldwin, Richard and Charles Wyplosz. ''The Economics of European Integration''. McGraw-Hill, London: 2004.
* Eichengreen, Barry. ''Reconstructing Europe's Trade and Payments The European Payments Union''. Manchester University Press, 1993.
* ''EPU/EMA''. European University Institute
* Kaplan, Jacob J., and Gunther Schleiminger. 1989. ''European Payments Union: Financial Diplomacy in the 1950s''. Oxford: Clarendon Press.
{{Authority control
History of international trade
International trade organizations
Pan-European trade and professional organizations
Trade blocs
Euro