10 Francs – France

In 1988, 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 followed the turbulent early 1980s, when President François Mitterrand's initial expansionist policies had led to severe franc devaluations and capital flight, forcing a dramatic "tournant de la rigueur" (austerity turn) in 1983. By 1988, a consensus on fiscal discipline and a strong franc policy—the "franc fort"—was firmly entrenched, aligning France closely with West Germany's powerful Deutsche Mark to anchor credibility and combat inflation.

Domestically, this commitment to the EMS framework required strict monetary policy, often at the expense of domestic economic growth and employment. The Banque de France, not yet independent, operated under government direction to maintain the franc's parity, primarily through high interest rates. This created a tension, as the government of Prime Minister Michel Rocard (appointed in May 1988) also sought to address social concerns following Mitterrand's re-election. The economy was in a phase of moderate growth, but the strong franc policy made French exports less competitive, contributing to a persistent trade deficit.

Looking forward, 1988 was a year of consolidation on the path toward greater European monetary integration. The success of the EMS in providing stability, despite occasional realignments, bolstered political momentum for a single currency—a vision that would be formally advanced with the Delors Report in 1989. Thus, France's currency policy in 1988 was not merely a domestic economic tool but a strategic political commitment, sacrificing some short-term national sovereignty to secure a leading role in the future European Union and its planned monetary union.