A flat or gently inclined shelf high in a glaciated mountain valley.
Bretton Woods system
The global financial and monetary system established in 1944 at the New Hampshire resort of Bretton Woods. It created the World Bank (q.v.) and the International Monetary Fund (q.v.), as well as a fixed link between the United States dollar and gold at US$35 per troy ounce. The system collapsed in 1971, when the link between the dollar and gold was broken, but the institutions survive.
The German central bank, with headquarters in Frankfurt am Main, was established in 1957.
Central Bank Council
The seventeen-member decision-making body of the Bundesbank (q.v.). The council includes the presidents of the Land central banks (q.v.) and the members of the Directorate (q.v.). The council meets every second Thursday.
Common Agricultural Policy (CAP)
First established in 1962, the CAP aims at ensuring the free trade of farm products within the European Union (EU--q.v.), guaranteeing the prices of these products, and maintaining protective tariffs against farm products from outside the EU.
Commonwealth of Independent States (CIS)
Created on December 8, 1991, with the signing of the Minsk Agreement by Belarus, Russia, and Ukraine. The Alma-Ata Declaration, signed by eleven heads of state on December 21, 1991, expanded membership in the CIS to all other former Soviet republics except Estonia, Georgia, Latvia, and Lithuania. Moldova joined the CIS in April 1994. The CIS is a confederation of former Soviet republics in which "coordinating bodies" oversee common interests in the economy, foreign policy, and defense of its members.
Conference on Security and Cooperation in Europe (CSCE)
See Organization for Security and Cooperation in Europe (OSCE).
Conventional Forces in Europe Treaty (CFE Treaty)
An agreement signed in 1990 by the member nations of the Warsaw Pact (q.v.) and the North Atlantic Treaty Organization (NATO--q.v.) to establish parity in conventional weapons between the two organizations from the Atlantic to the Urals. The treaty included a strict system of inspection and information exchange and remained in force, although not strictly observed by all parties, in the mid-1990s.
deutsche mark (DM)
The national currency unit, consisting of 100 pfennigs. The value of the deutsche mark has fluctuated with international monetary developments--generally upward since its introduction in the currency reform of 1948. The number of deutsche marks per US$1 averaged 4.20 in 1950, 4.20 in 1960, 4.00 in 1965, 3.65 in 1970, 2.62 in 1975, 1.96 in 1980, 2.94 in 1985, 1.62 in 1990, 1.56 in 1992, 1.65 in 1993, 1.64 in 1994, and 1.43 in 1995.
The eight-member executive board of the Bundesbank (q.v.). Its members sit on the Central Bank Council (q.v.).
discount rate
Interest rate at which the Bundesbank (q.v.) lends to banks by rediscounting trade bills and treasury bills falling due within three months.
European Commission
A governing body of the European Union (EU--q.v.) that oversees the organization's treaties, recommends actions under the treaties, and issues independent decisions on EU matters.
European Community (EC)
A grouping of three primarily economic organizations: the European Economic Community (EEC), the European Atomic Energy Community (Euratom or EAEC), and the European Coal and Steel Community (ECSC). Founded separately in 1952 and 1957, the three came to be known collectively as the EC. Executive power rests with the European Commission (q.v.). Members in 1993 were Belgium, Britain, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. In November 1993, the EC was subsumed under a new organization, the European Union (EU--q.v.).
European Council
A body formed when the heads of state or government of European Union (EU--q.v.) member states meet. Held at least twice a year, these meetings determine the major guidelines for the EU's future development.
European currency unit (ECU)
Established in 1979 as a composite of the monetary systems of European Community (EC--q.v.) member nations, the ECU functions in the European Monetary System (EMS--q.v.) and serves as the unit for exchange-rate establishment, credit and intervention operations, and settlements between monetary authorities of member nations.
European Economic Area (EEA)
An economic area encompassing all the members of the European Union (EU--q.v.) and the European Free Trade Association (EFTA--q.v.), with the exception of Switzerland. Established in 1993, the EEA went into effect on January 1, 1994. The EEA is a single market for the free movement of labor, services, capital (with some restrictions on investments), and most products. EFTA members have agreed to accept EU regulations in many areas, including company law, education, environmental protection, mergers, and social policy.
European Economic Community (EEC)
See European Community (EC).
European Free Trade Association (EFTA)
Founded in 1960, EFTA aims at supporting free trade among its members and increasing the liberalization of trade on a global basis, particularly within Western Europe. In 1995 the organization's member states were Iceland, Liechtenstein, Norway, and Switzerland.
European Monetary System (EMS)
Established in 1979 by the European Economic Community (EEC--q.v.), the EMS was created to stabilize currency values because the Bretton Woods system (q.v.) proved not fully satisfactory. All European Union (EU--q.v.) countries are EMS members. The EMS is to be succeeded by the European Monetary Union (EMU--q.v.).
European Monetary Union (EMU)
The EMU is a plan for a single European central bank and for a single European currency to replace national banks and currencies for those European states that qualify. The EMU is the planned follow-on of the European Monetary System (EMS--q.v.).
European Union (EU)
Successor organization to the European Community (EC--q.v.), officially established on November 1, 1993, when the Treaty on European Union (q.v.) went into effect. The goal of the EU is a closer economic union of it member states, including the European Monetary Union (EMU--q.v), a greater unity in matters of justice and domestic affairs, and the development of a common foreign and security policy. To the members of the EC, the EU added Austria, Finland, and Sweden, effective January 1, 1995.
exchange-rate mechanism (ERM)
A mechanism of the European Monetary System (EMS--q.v.), the ERM is designed to establish fixed exchange rates among EMS currencies. Not all European Union (EU--q.v.) states are members.
General Agreement on Tariffs and Trade (GATT)
The global trading system, based on the Havana Treaty of 1947, that obligates states to follow the "most favored nation" principle to avoid discriminatory trade practices. GATT was succeeded by the World Trade Organization (WTO) on January 1, 1996.
gross domestic product (GDP)
The total value of goods and services produced exclusively within a nation's domestic economy, in contrast to the gross national product (GNP--q.v.). Usually computed over a one-year period.
gross national product (GNP)
The total value of goods and services produced within a country's borders and the income received from abroad by residents, minus payments remitted abroad by nonresidents. Usually computed over a one-year period.
Group of Seven (G-7)
The seven-nation organization was established in 1973, with an annual summit beginning in 1975, to attempt to coordinate its members' economic policies. Members are Britain, Canada, France, Germany, Italy, Japan, and the United States.
International Monetary Fund (IMF)
Established along with the World Bank (q.v.) in 1945, the IMF is a specialized agency affiliated with the United Nations that takes responsibility for stabilizing international exchange rates and payments. The main business of the IMF is the provision of loans to its members when they experience balance of payments difficulties. These loans often carry conditions that require substantial internal economic adjustments by the recipients.
Land central bank
The central bank of a German state (Land; pl., Länder) or group of Länder. The presidents of the nine Land central banks sit on the Central Bank Council (q.v.) of the Bundesbank (q.v.).
Lombard rate
The interest rate at which the Bundesbank (q.v.) extends credit to commercial banks in order to cover temporary financing gaps. It is usually somewhat higher than the Bundesbank's discount rate (q.v.).
Maastricht Treaty
See Treaty on European Union.
The communist party's system of appointing key personnel in the government and other important organizations, based on lists of critical positions and people in political favor. Also refers to the individuals included on these lists.
North Atlantic Treaty Organization (NATO)
Frequently called, particularly in official NATO publications, the Atlantic Alliance or the Alliance. Created as a defensive political and military alliance by the signing of the North Atlantic Treaty in April 1949, with twelve charter members: Belgium, Britain, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, and the United States. Greece and Turkey became members in 1952, the Federal Republic of Germany in 1955, and Spain in 1982.
Organisation for Economic Co-operation and Development (OECD)
Established in 1961 to replace the Organisation for European Economic Co-operation (OEEC), the OECD is an international organization composed of the industrialized market economy countries, as well as some developing countries, by providing a forum in which to establish and coordinate policies.
Organisation for European Economic Co-operation (OEEC)
See Organisation for Economic Co-operation and Development (OECD).
Organization for Security and Cooperation in Europe (OSCE)
The Conference on Security and Cooperation Europe (CSCE) was established as an international process in 1972. The group, consisting of fifty-three nations in 1995, included all the European countries and sponsored joint sessions and consultations on political issues vital to European security. The Charter of Paris (1990) changed the CSCE from an ad hoc forum to an organization having permanent institutions. In 1992 new CSCE roles in conflict prevention and management were defined, potentially making the CSCE the center of a Europe-based collective security system. In the early 1990s, however, applications of these instruments to conflicts in Yugoslavia and the Caucasus did not have a decisive impact. In January 1995, the CSCE was renamed the Organization for Security and Cooperation in Europe (OSCE).
Treaty on European Union
The agreement that established the European Union (EU--q.v.) in November 1993. It is usually referred to as the Maastricht Treaty, the small Dutch town where it was negotiated by the twelve European Community (EC--q.v.) members in December 1991.
Uruguay Round
The trade negotiating round, under the auspices of the General Agreement on Tariffs and Trade (GATT--q.v.), concluded at the end of 1993. It pitted the United States against France and some other European Union (EU--q.v.) states over EU agricultural subsidies, with Germany in the middle. A compromise was reached, including agreement for establishing a World Trade Organization (WTO). On January 1, 1996, GATT was succeeded by the WTO.
value-added tax (VAT)
A tax applied to the additional value created at a given stage of production and calculated as a percentage of the difference between the product value at that stage and the cost of all materials and services purchased as inputs. The VAT is the primary form of indirect taxation applied in the European Union (EU--q.v.), and it is the basis of each country's contribution to the community budget.
Warsaw Pact
Informal name for the Warsaw Treaty Organization, a mutual defense organization founded in 1955, which included the Soviet Union, Albania (which withdrew in 1968), Bulgaria, Czechoslovakia, the German Democratic Republic (GDR, or East Germany), Hungary, Poland, and Romania. The Warsaw Pact enabled the Soviet Union to station troops in the countries to its west to oppose the forces of the North Atlantic Treaty Organization (NATO--q.v.). The pact was the basis of the invasion of Hungary (1956) and of Czechoslovakia (1968); it was disbanded in July 1991.
Western European Union (WEU)
Founded in 1948 to facilitate West European cooperation in economic, social, cultural, and defense matters. Reactivated in 1984 to concentrate on the defense and disarmament concerns of its members, the WEU is headed by a council consisting of its members' ministers of foreign affairs and defense. The council meets twice a year; lower-level WEU entities meet with greater frequency. In 1995 WEU members were Belgium, Britain, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Austria, Denmark, Finland, Ireland, and Sweden were observers; Iceland, Norway, and Turkey were associate members; and a number of East European states were associate partners.
World Bank
Informal name for a group of four affiliated international institutions: the International Bank for Reconstruction and Development (IBRD); the International Development Association (IDA); the International Finance Corporation (IFC); and the Multilateral Investment Guarantee Agency (MIGA). The four institutions are owned by the governments of the countries that subscribe their capital for credit and investment in developing countries; each institution has a specialized agenda for aiding economic growth in target countries.