documents from 07/1950 to 11/1965
The European Pyaments Union set out to provide an automatic mechanism for the settlement of net surpluses and deficits of OEEC member countries by gold payments and credit, granted through a central agency. The BIS (Bank of International Settlements) in Basle, acted as agent for the OEEC in respect of the EPU operations, expressing Member countries credits and deficits with each other in a single credit or deficit balance with the EPU each month. As a key component of the OEEC, the EPU was both an instrument of Europe's economic recovery and integration, and an important factor in its transition from bilateralism to currency convertibility. The EPU provided the basis which enabled all the western European currencies to be transferable into one another, thereby enhancing the OEEC's efforts in liberalising intra-European trade from quantitative restrictions and discriminatory regulations. The successor to this initiative was signed in 1955 and came into force in 1959 following the termination of the EPU. The Agreement provided a framework for monetary co-operation in Europe during the period of transition to full convertibility of currencies. Furthermore the EMA acted as a multilateral mechanism for an exchange guarantee on central banks holdings of member country currencies.