The Results of the 1971 Reform of Escudo Monetary Zone Union. The Angolan and Mozambican Divergence

  • Maria Eugénia MataEmail author
Part of the Palgrave Studies in Economic History book series (PEHS)


In spite of settling the outstanding payment orders, the reform of 1971 could not sustain the payment arrears in the Escudo Monetary Zone. As Angolan and Mozambican deficits toward the Metropolis were overwhelming for the EMZ Fund, these colonies were in great need of support in 1973 and 1974. Delayed transfers increased again, and their sudden settlement was considered to be dangerous, because it would introduce such a high amount of liquidity in the Metropolis’ economy that inflationary pressure would be felt, while a boom already flourished in the Lisbon stock market. The more payments were settled, the more transfers were demanded. Parallel markets also spread, benefiting from a “collective psychosis” demand for transfers. The first oil shock brought new constraints in the autumn of 1973, and a military revolution sought to put an end to the Portuguese political regime on 16 March 1974, but failed. A successful one took place on 25 April.


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© The Author(s) 2020

Authors and Affiliations

  1. 1.Nova School of Business and EconomicsUniversidade Nova de LisboaCarcavelosPortugal

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