10 Francs (Victor Hugo) – France

In 1985, France's currency situation was defined by its pivotal role within the European Monetary System (EMS), established in 1979. The French franc was part of the Exchange Rate Mechanism (ERM), which aimed to reduce exchange rate variability and achieve monetary stability in Europe by pegging currencies within agreed fluctuation bands. This period was characterized by the "franc fort" (strong franc) policy, a deliberate strategy by the Socialist government of President François Mitterrand and Prime Minister Laurent Fabius to maintain a high parity with the Deutsche Mark. This policy marked a significant U-turn from the expansionist policies of the early 1980s, prioritizing anti-inflationary discipline and alignment with West Germany's Bundesbank to anchor credibility.

Domestically, this commitment came at a cost. Maintaining the franc's position within the ERM required high interest rates, which constrained economic growth and contributed to persistent unemployment. The strong franc also made French exports more expensive on the international market, hurting industrial competitiveness. However, the government viewed this as a necessary sacrifice to break the cycle of devaluation-inflation that had plagued the franc in the 1970s and early 1980s, and to firmly position France as a core architect of European economic integration.

The relative stability of 1985 was, in hindsight, a calm before the storm. The system faced inherent tensions, as the needs of the French economy did not always align with German monetary priorities. These strains would later erupt in the severe ERM crises of 1992-1993, which tested the franc fort policy to its limits. Nevertheless, in 1985, the framework was holding, solidifying France's commitment to a fixed exchange rate regime as the foundation for its European policy and the eventual launch of a single currency.