gold parity

To defend its national gold parity, each nation came to regulate domestic money issue according to its balance of international payments.

These options were: "wage and price deflation to restore external and internal balance at the current gold parity; trade and payments restrictions to limit spending on imports and reduce gold outflows; or abandoning the gold standard and allowing the exchange rate to depreciate".

Prior to the institution of a common currency, the then European Economic Community decided in 1962 to denominate its transactions in its own internal unit of account - initially the gold parity unit of account, fixed to the value of gold, and equivalent to the US Dollar.

Different units of account had previously been used for different purposes, including the budget, the European Coal and Steel Community, and the Common Agriculture Policy following the abandonment of the gold parity unit of account in the early 1970s in the wake of the collapse of the Bretton Woods system.