The exchange rate mechanism was based solely on Germany’s economic model more than anything else; It’s pertinent to point out that the Italians also had similar problems prior to black Wednesday.

Nigel Lawson, the chancellor, at the time was shadowing the Deutsche mark, a preparation for joining the ERM, once he found out that Margaret Thatcher was taking advice from the late Professor Alan Walters, he ( Nigel Lawson) resigned. This led to John Major to being promoted to the Chancellor of the exchequer, whereupon he convinced the late baroness to join the ERM.

In a cruelly tragic fashion, his chickens came home to roost on the 16th of September 1992, given that it was he, who took Britain into the exchange rate mechanism, a decision, which ruined the conservatives reputation for economic competence and paved the way for Tony Blair’s labour party to win the 1997 election.

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