The European Monetary System (EMS) is introduced on the initiative of the Commission President Roy Jenkins setting Europe on the road towards the euro.
The EMS is made up of the European Currency Unit (Ecu) and the Exchange Rate Mechanism (ERM).
The Ecu - originally a unit for the community's internal budget - takes on some of the characteristics of a real currency and is used, for example, in travellers' cheques and bank deposits.
It is also the denomination for the ERM - a system which gives national currencies a central exchange rate against the Ecu. Each currency can fluctuate above and below this rate within certain boundaries. All the community's members apart from the UK join the ERM at this time.
In this year, Europeans vote in the first direct elections to the European Parliament.
