. corrections of exchange rates were made too late and often brought about new misalignments. secondly, the years in which the system flourished have to be seen against the backdrop of restricted convertibility. it was not until 1961 that most west european countries introduced full convertibility. and precisely in the united states, too, capital controls were a frequently deployed instrument into the 1960s. incidentally, even the financial markets which - - from the present perspective - - were still not very developed at that time showed their strength in that situation. there was, on the one hand, the ability to bypass administrative regulations. the euro - dollar market came into being as early as the late 1950s, for example. on the other, there was the ability to exert speculative pressure on a currency with an exchange rate that appeared no longer to deserve confidence. thirdly, countries with a better domestic stability record than the anchor country at that time, the united states - - such as germany in the 1096s and early 1970s - - imported inflation through the fixed rate system. the expression “ dollar inflation machine ” was in use for a time. a firm anchor and a timely realignment of parities - - those are the basic requirements of any stability - oriented system of fixed exchange rates. the european monetary system established at the end of the 1970s has performed better than the bretton woods system in a number of respects. it has provided a better solution for the question of the nominal anchor - - without officially designating the d - mark for that role. rather, it is a role which the d - mark has acquired on account of its long - standing stability and its early convertibility. the parity - grid system permits the currency which is most stable on a long - term basis to set the standard. the anchor in the erm is a position which can be recalled, however. admittedly, even in the erm there have been times when exchange rates that had become doubtful have not been corrected in time - - as the events of 1992 and 1993, in particular, showed. at all events, it was possible to guide the erm out of the crisis by a formal widening of the fluctuation margins and largely stabilise it in the ensuing period. iv. despite a number of earlier reform efforts, the bretton woods system eventually collapsed in 1973. since then, the exchange rates of most european countries and of japan have floated against the us dollar. by abandoning the fixed rates against the us dollar

, well above the target for a balanced primary budget, greece ’ s fiscal position deteriorated in 2014, on the back of political and economic uncertainty in the late part of the year. nevertheless, the primary balance remained positive, albeit small and falling considerably short of the targeted 1. 5 % of gdp. in the course of 2015, fiscal aggregates showed strong fluctuations, reflecting developments in tax revenue, public investment expenditure and government arrears. following a downward revision of the primary balance target to a deficit of 0. 25 % of gdp ( from an earlier target for a 3. 0 % surplus ) and the adoption of additional fiscal measures, the primary budget in 2015 is expected to have been balanced or slightly in surplus. the major challenge of 2015 : safeguarding financial stability against the background of uncertainty that prevailed in the first half of 2015, it became crucially important to safeguard financial stability under threat from a pick - up in deposit outflows, a spike in non - performing loans ( reversing the picture that had begun to emerge in the course of 2014 ), the non - eligibility of greek securities as collateral in eurosystem monetary policy operations and, above all, the heated debate over a possible greek exit from the euro area. at these most difficult of times, the bank of greece fulfilled its primary duty arising from its participation in the eurosystem and from its statute, namely to safeguard monetary stability and support liquidity in the domestic banking system, while at the same time safeguarding its independence and credibility helping to restore normality. in this respect : • it provided timely and reliable information to the government and political parties, while raising public awareness through its reports and public interventions ; • it ensured the uninterrupted funding of the banking system through the emergency liquidity assistance ( ela ) mechanism ; • it supplied credit institutions with banknotes, averting any cash shortages even in the remotest parts of the country ; • it developed, in collaboration with the government and the hellenic financial stability fund ( hfsf ), a strategy on non - performing loans ( npls ) ; • it carried out the asset quality review of banks ; bis central bankers ’ speeches • it completed the successful recapitalisation of significant and less significant banks, without shocks to the credit system ; • it engaged in close cooperation with the single supervisory mechanism ( ssm ) through the participation of members of its staff in joint supervisory teams ; • it helped to minimise the impact of capital controls