Britain's Exchange Rate Mechanism crisis in 1992 was the first Brexit

WAS Sept 16, 1992 Britain's first "Brexit"? And then there are those who might date the first schism with Europe to Henry VIII's break with the Church of Rome in 1530, or to the departure of Roman legions from England around 400 AD. There may be parallels between the withdrawal from the Exchange Rate Mechanism (ERM) on Black Wednesday and the retreat of the British Expeditionary Force from Dunkirk in 1940, which, as Winston Churchill said, was no victory - "wars are not won by evacuations" - but, like the European setback in 1992, allowed Britain to regroup its forces and regain ground and even glory in the years thereafter. Through whatever lens it is viewed, the chronicle of Britain's entanglement with the ERM undoubtedly represents a major landmark in the UK's European history.

Having advanced separately alongside the creation of European institutions and the march of economic integration in the 1950s and 1960s, Britain, by entering the European Community in 1973, established significant convergence with the continent. However, Britain's participation in Europe's monetary arrangement - the snake - lasted but a few weeks in 1972. Sterling and the British economy developed on a semi-detached path through the rest of the 1970s and during the ERM's formative 1980s. Joining the ERM in October 1990 marked a major departure; Britain, it seemed, had become a full European participant. Then came the traumatic exit from the ERM - a reversion to the UK's traditional distance from the European core.

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