It is now largely overlooked, but the 19th century had its own precursor to EMU in the shape of the Latin Monetary Union, set up principally to try to solve the hoary problems of silver:gold bimetallism. But, if much of the Union’s history was dogged by the narrow technical issues of how, firstly, to structure its members’ own monetary system and, thereafter, to align it more closely with those of the non-members, there were other features, too, which are still very much germane today.
Unrealistic expectations, short-term politics, and – as ever – too much debt plagued both Greece and Italy in those days, too, with repercussions for the other LMU members as well as for their trading partners in the wider world.
[The following appears as Chapter II in my book ‘Santayana’s Curse’available on Kindle] Among the more germane of these is the extent to which the French government’s desire to broaden its diplomatic reach, to enhance its international prestige, and – let us be charitable – to facilitate the work of its wealth creators was stymied by the opposition of the Banque de Franceto any move to the unique gold standard which was adopted as a goal of the conferences, almost from the off, in recognition of the emergent consensus regarding the impossibility of maintaining a full bimetallic standard.
This post was published at David Stockmans Contra Corner on July 6, 2015.
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