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 'The Currency Snake'
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With the widening of the fluctuation bands in the Bretton Woods system to +/-2.25 per cent, the EC currencies could fluctuate against each other by as much as 9 per cent. In order to stabilise the exchange rates within the EC a European currency system was therefore established in 1972. It reduced the overall fluctuation band between the EC currencies to 4.5 per cent. This system was known as "the snake" since the exchange rates could "slither" within the outer margins fixed by the Bretton Woods system.
Even though it did not join the EC until 1 January 1973, Denmark was part of "the snake" from the start.
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