Golden Fetters

by Henry Farrell on February 24, 2012

From David Marsh’s “book on the origins of the euro”:, some indication that the last few years of gold standard lunacy were baked into the cake from quite early on.

bq. The two leaders [Giscard d’Estaing and Helmut Schmidt] professed the common aim, at a wider European level that superseded national borders, to regain monetary stability forfeited through a century of war and disruption. According to Giscard, the road to a European money was part of a journey that had been abandoned when the Gold Standard ended:’During the second half of the nineteenth century, up to the 1914 war, France enjoyed continuously successful economic growth, and a steady build-up of its engineering industry, with a currency that was totally stable. With their roots in a rural economy and their cultural leaning towards the fundamental values of savings and thrift, the French as a nation cannot cope with an inflationary economy and a weak currency. They thrive on stable money.’ Schmidt, too, affirmed a link between the goal of EMU and the Gold Standard:’We had a currency union up to 1914 in Western Europe – the Gold Standard. From a historical point of view, I would draw a direct parallel.’ (p.69)