The strict monetary discipline which characterized the union -
evaporated. The currencies diverged - a result of a divergence of
inflation targets and interest rates. The East African Currency Area
was formally ended in 1977.
Not all monetary unions ended so tragically. Arguably, the most famous
of the successful ones is the Zollverein (German Customs Union).
The nascent German Federation was composed, at the beginning of the
19th century, of 39 independent political units. They all busily minted
coins (gold, silver) and had their own - distinct - standard weights
and measures. The decisions of the much lauded Congress of Vienna
(1815) did wonders for labour mobility in Europe but not so for trade.
The baffling number of (mostly non-convertible) different currencies
did not help.
The German principalities formed a customs union as early as 1818. The
three regional groupings (the Northern, Central and Southern) were
united in 1833. In 1828, Prussia harmonized its customs tariffs with
the other members of the Federation, making it possible to pay duties
in gold or silver. Some members hesitantly experimented with new fixed
exchange rate convertible currencies. But, in practice, the union
already had a single currency: the Vereinsmunze.
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