The G3 countries (Germany, Japan, and the US) have been using a form of inflation targeting in their monetary policy since 1979, which has been successful. They focus on expected inflation rather than past inflation. The E3 countries (UK, France, and Italy) have been influenced by German monetary policy, even before the hard ERM. When the EMS collapsed, interest rates in the E3 countries were higher than needed based on their economic conditions. This suggests that inflation targeting may be better than fixed exchange rates for guiding monetary policy.