Final answer:
The chief objectives of the European Monetary System included creating a zone of monetary stability, coordinating exchange policies, and paving the way for the European Monetary Union. A merged currency like the euro removes exchange rate risks but also limits national autonomy in monetary policy.
Step-by-step explanation:
The European Monetary System (EMS) aimed to achieve several objectives. The primary goals included establishing a zone of monetary stability in Europe, coordinating exchange rate policies vis-à-vis non-EMS currencies, and laying the groundwork for a more integrated monetary union, which was eventually realized with the introduction of the euro. Adopting a single currency, or a merged currency, means that member nations relinquish control over domestic monetary policies to a central entity, like the European Central Bank (ECB) in the case of eurozone countries. For example, Portugal and other member nations have representation in the ECB, but may not always agree with its policy decisions which affect their individual economies. Having a single currency eliminates foreign exchange risk between member countries but also limits their ability to address national economic concerns independently, such as controlling inflation, managing unemployment, and maintaining a sustainable balance of trade.