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European Payments Union 
Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)

An intra-European payments union centalizing periodic settlement for imports and exports and providing for a pool of credits and gold to be granted to and received from members under a quota system.  The EPU was terminated effective December 27, 1958, and succeeded by the European Monetary Agreement.

The EPU came into being July 1, 1950, by agreement of the country members of the Organization for European Economic Cooperation (OEEC).  The latter had replaced the original Committee of European Economic Cooperation (CEEC), in April, 1948, and is an organization of European recipients of U.S. economic assistance.  The EPU was intended to be a temporary system, designed to assist European countries "until they are fully able to take their place in a world-wide system."  The EPU set up the ideal of trade equilibrium among members and removal of trade discriminations.

Although limited progress was made toward these objectives, the EPU as a multilateral settlement scheme was regarded as successful.  Member countries paid in original quota contributions generally equal to 15% of all visible and invisible transactions during 1949 with other members of the OEEC and the sterling area.  The Economic Cooperation Administration (ECA) of the U.S. made an initial contribution of $350 million as initial operating capital and in addition gave assistance to member structural debtors.  At the final accounting, 7 of the 16 member nations showed a cumulative net surplus, the largest creditor,  West Germany, accounting alone for $1,026.8 million surplus of total surpluses of net creditor members of $1,314.9 million.  Other creditor countries at final accounting were Belgium-Luxembourg, the Netherlands, Italy, Austria, and Sweden.  The largest net debtor members were France ($484.8 million) and the United Kingdom ($378.9 million), compared to total deficits of $1,117.4 million for the debtor countries.  Other debtor countries were Iceland, Switzerland, Greece, Turkey, Portugal, Denmark, and Norway.  The accounting was kept on the basis of a unit equivalent to the U.S. dollar.

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