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Luca Einaudi [*]

Monetary unions have been a recurring element in European history, driven by the need to overcome obstacles to trade caused by the fragmentation of political authority. Between the 14th and the 19th centuries, a series of coinage unions were set up in the German speaking world, which served as models for the Latin and Scandinavian monetary unions in 1865 and 1872. With the growing size of participating states and the transformation of money, thanks to the end of bimetallism and the wider use of bank notes and deposits, the objectives and the practical management of monetary unions became more complex and more political. Monetary union became strictly associated with European federalism and required new common institutions after the end of the classical metallic standards in 1914.

European Monetary Union has been one of the most contentious issues of the last decade of the20th century and continues to be a controversial subject in many countries, particularly in the United Kingdom. Seen in the context of a much longer span of European monetary history, it is not a sudden and unexpected episode, without precedents in its objectives, in the instruments used to achieve it, or in the level of enthusiastic support and acrimonious hostility caused by it. The quest for a stable and common monetary instrument is as long as the history of currency. It belongs as much to the history of ideas as to the history of monetary diplomacy and of nation building.

The episodes discussed in this article range from the 14th to the 20th century. Until the advent of the euro, existing supranational monetary unions have always taken the form of multiple common currencies; that is, a fixed exchange rate between currencies. Monetary unions, or rather coinage unions with single currencies, have been proposed repeatedly throughout the centuries, defined as 'universal', 'international' or 'European', but until 1999 they have remained purely theoretical.

A fundamental distinction has to be made between supranational monetary unions agreed on by sovereign states (such as the German, Latin and Scandinavian monetary unions), and the national political unifications followed by the introduction of a single currency (the establishment of the Swiss franc, the Italian lira and the German mark).[1] The latter have been occasionally quoted as relevant precedents for the euro, but they are not, since they lack most of the difficulties of intergovernmental negotiations, particularly the matter of vetoes, and will be discussed only briefly.

The institutional architecture of international monetary arrangements depends on the prevailing monetary standards. As long as money was a commodity (gold and/or silver coins) and paper money was absent or very limited, exchange parities were close to the relationship between the intrinsic metallic content of the various types of coinage in circulation. Therefore few rules and no common institutions (central banks) were needed. In the main countries of continental Europe the role of paper money became dominant only during the second half of the 19th century and the gold standard disappeared only during the 1930s. The wider discretion in monetary issue offered by paper standards required more rules and institutions to manage monetary unions. This explains why the number of practical experiments declined while new theories of monetary union boomed. The large monetary unions, or rather coinage unions, of the 19th century disappeared in the 20th century, while increasingly elaborate projects, taking into account the new difficulties of money, flourished in the 20th century until the birth of the euro.

Early projects for monetary union were not connected with the idea of a European political union. The driving force was the obvious convenience of a reduced number of currencies for economic activity in natural areas of trade, often legally defined by free trade agreements, customs unions or common markets. During the 19th century the call for a different political organisation of Europe began to coincide with the prospect of monetary union. It remained the goal of isolated individuals until after the World War I, but developed a stronger appeal after 1945, coinciding with the wide exchange rate fluctuations following the end of the classical gold standard in 1914. Furthermore, the experiences of two world wars served to strengthen the idea that Europe could avoid the repetition of such clashes of hegemonic ambitions only by weakening the nation state in favour of a European political entity with some sort of federal character.

Monetary chaos and early monetary unions

After the collapse of the Roman empire, the destruction of political sovereignty had been accompanied by monetary proliferation. The multiplication of the number of currencies existing in Europe was briefly checked only by the Carolingians after 780 AD with the introduction of the duodecimal system (the livre-lira-pound system, which persisted in Britain until 1971 in the form of [pounds].s.d.). With the division of the territories of Charlemagne's empire between his heirs, monetary sovereignty split on the lines of political sovereignty. In the following centuries several thousand cities, principalities, kings and bishops issued coinages of all sorts, grabbing a little slice of the seignorage profits coming from the issue of coinage.

Such a monetary dispersion conflicted with the need for widely recognised currencies for international trade, especially considering that by the 13th century trade between Mainz and Frankfurt, or between Florence and Milan, had become international trade. Since money was a commodity (a certain weight in silver, occasionally in gold, with a particular fineness), its international value could be established precisely by weighing coins and assaying the metal. [2] Therefore several common currencies emerged spontaneously: they were not single currencies, adopted legally by several states bound by treaties. Much more simply, market forces transformed the coinage of the strongest commercial power of the time into a common coinage for international transactions. This happened when new currencies of particular quality appeared, like the Florentine gold form and the Venetian gold ducat between the 13th and the 15th century, with the Spanish silver 8 reales in the 16th century, the Dutch silver liondaler in the 17th ce ntury, the Austrian silver thaler of Maria Theresa in the 18th century, or British and French gold and silver coinage in the 19th century (Williams, 1997; Pflimlin, 1999). The image of the original issuer was often copied by other states to facilitate the circulation of the copies. This was in fact a parallel common currency and certainly not a single currency.

Few of these arrangements proved really satisfactory, since only some states issued these informal common coins and domestic confusion persisted anyway, with all sorts of local and foreign coins circulating at the same time. The limited levels of monetary convergence were systematically threatened by the debasement of coinage, undertaken by local rulers confronted with extraordinary expenditures (generally wars). Since the tax system was still rudimentary, the large income produced by the reduction of the intrinsic metallic content of each unit of currency had an irresistible appeal. [3]

The simplest form of monetary unification was the construction of nation states, with the automatic substitution of provincial issues by those of the centralised monarchy. Therefore the plague of monetary proliferation continued to be intense where political authority was more scattered between different entities, particularly in Germany, the Helvetic Confederation and Italy. It is not surprising that the earliest monetary unions and agreements took place in Germany and were theorised about in Italy (Scaruffi, 1582; see table 2 for the evolution of such theories).

In the 16th century, Germany was still divided into 1800 states and German regional monetary unions can be traced as far back as 1379, when a monetary league between the Hanseatic cities was created, followed by a Monetary Federation of the Rhine in 1386, a South German monetary convention in 1566 and the Austro-German monetary union in 1753 (see table 1) (Droulers, 1990, pp. 39-41). The duration of such unions depended on political conditions, the stability of existing frontiers and how long member states could refrain from using extra seignorage income from the debasement of the currency. Typically, monetary unions would establish common rules for the separate issue of local currencies, so that the various systems would become compatible, either through the adoption of a common unit (usually the thaler in the north and the gulden or form in the south) or through a simple fixed exchange rate between the coinage of monetary allies. Bank notes or common banks of issue were not included in any of the German mon etary conventions until after national political unification in 1871. Even though the earliest European banknotes had appeared in Sweden in 1661, they circulated in Germany in large quantities only from the 1850s onwards.

Political unions completed by monetary unions

Until the completion of German monetary unification under Bismarck, the number of currencies in Europe declined continuously, from approximately 2000 in 1500, to 200 in 1789 and 18 in 1871 (see chart 1).The reasons for this consolidation were not international unions but the simplification of the political map of Europe, with the construction of the German, Austro-Hungarian, Russian and Ottoman empires, the unification of Italy and the strengthening of the Helvetic Confederation. As a general rule in Europe, the conquering state imposed on the conquered territories its currency and its national bank of issue, if it had one. [4] Some interesting cases of political union followed by monetary union are due to their connection with larger processes of convergence, as in the case of Switzerland, Italy and Germany in the 19th century (table 3).

Swiss monetary unification was a process distinct from ordinary nation building; an existing loose federal arrangement was reinforced through the adoption of a new constitution giving more powers to the central government after a short internal conflict in 1845-6, the Sonderbund war. The creation of the Swiss franc in 1850 ended the right of the 22 cantons to mint their own coinage, but the right to issue paper money remained under the control of the cantons. No central bank was created until the Swiss National Bank was formed in 1907. The choice of the new single unit was linked to Swiss international trade and the French franc was selected instead of the south German gulden because of the economic weight of France (Vanthoor, 1996, p. 13). According to German bankers, such a choice had the effect of diverting Swiss financial and commercial operations away from Frankfurt towards Paris, despite the efforts of the German city to retain its traditional links. [5] Switzerland was too small to decide alone on its metallic standard at a time of great international flows of silver and gold. It opted initially for a silver standard in 1850, but was forced to legalise the massive circulation of French gold coinage in its territory in 1860 and then decided to join the Latin Monetary Union in 1865, pressing its monetary allies for the adoption of the gold standard (Willis, 1901).

Italian monetary union was completed in 1862, one year after the formal creation of the Kingdom of Italy. A total of 282 different types of old coins had to be withdrawn from circulation (De Mattia, 1959). Following the example of Switzerland, Italy adopted the French franc. This reflected long standing French economic influence in Italy and the fact that the Piedmontese lira was already based on the franc. Despite its preference for a gold standard, the Italian government also decided to adopt a bimetallic system, officially because that was the French system. It must be said that Italy would not have been able to afford a real gold standard at that time, due to general economic weakness, associated with large budget and trade deficits. The National Bank in the Sardinian States was transformed into the National Bank of the Kingdom of Italy. It held a dominant position but had to face five other regional banks of issue, strongly defended by local interests (Casella, 1989). It absorbed some of its competitors in 1893, becoming the Bank of Italy, but obtained a monopoly of issue only in 1926.

As in Italy, the currency of the new German Empire (1871) originated from the state leading the process of unification. The German mark was a third of a Prussian thaler. It owed nothing to the French currency because the new state had emerged after a war against France accompanied by strong currents of nationalism. Bismarck refused to link the mark to the franc-based unit of the international union projected in 1867 (see the section on the Latin Monetary Union below) despite requests from southern German chambers of commerce and some economists. The gold standard was formally adopted in 1873 and the Prussian Bank was transformed into a national central bank, the Reichsbank, in 1876, progressively absorbing residual rights of issue of smaller provincial banks (Holtfrerich, 1989).

German unification marked the culminating point of monetary simplification in Europe during the second millennium: only eighteen currencies were left in Europe in 1875 and eight of these were officially linked either by the Latin Monetary Union (LMU) or by the Scandinavian Monetary Union.

Monetary proliferation

An important aspect of political unification imposed by force is that it is more likely to be reversed as soon as the central government is defeated in war or weakened by economic disasters, leading to secessions followed by currency proliferation. Indeed the 20th century has been characterised by growing monetary diversity (see chart 1 and table 4). The decline of the Ottoman empire throughout the 19th and early 20th century led to the independence of several Balkan states, all of which adopted independent currencies based on the franc and the LMU system. World War I accelerated the process, with the collapse of German, Russian and Austro-Hungarian empires (Garber and Spencer, 1994). In the mid-1920s, the strong depreciation of the franc germinal and the end of the LMU removed the unifying model followed by the new central European and Balkan states, leading to further monetary fragmentation. The 1990s increased further the number of European currencies, after the dismemberment of the USSR, of the FSR of Yug oslavia and of Czechoslovakia. Monetary proliferation has been one of the consequences of the quest for independence and has marked those parts of Europe currently outside the European Union (EU). The areas formerly ruled by the Austro-Hungarian crown included eleven different currencies in 1999, the Soviet rouble was replaced by fifteen currencies, the Ottoman kurush by nine currencies and the German imperial mark by three.

Analysing the case of former USSR, Patrick Conway suggested that there are three main reasons to leave a currency area: (i) nationalism, (ii) a desire to insulate against monetary shocks originating in the economies of other members, (iii) a desire to increase national control over the collection of seignorage from money creation (Conway, 1995, p.1). These objectives, broadly defined, also reflect the main reasons for the termination of supranational monetary unions.

19th century supranational monetary unions

The supranational monetary agreements reviewed above took place among German speaking countries and involved relatively small areas. In the 19th century these two limits were overcome, initially as a consequence of French revolutionary expansionism and then following the developments of the industrial revolution, the growth of international commerce, of free trade agreements and of international capital movements (see table 1).

An early form of European common currency was established by Napoleon I following his conquests in France, continental Italy, Belgium, Holland, Switzerland and parts of Germany. The bimetallic franc germinal, created in 1803, was extended to Italy with a 1 to 1 exchange rate, through the lira of the Napoleonic Kingdom of Italy, and Murat's Kingdom of Naples, and to Germany through the frank of the Kingdom of Westphalia. In 1807 Napoleon sent instructions to his subordinate kings and princes to adopt common units linked to the franc: 'this way there will be a monetary identity throughout Europe, a great advantage for trade' (Parieu, 1871, p.148). Once in St Helena, Napoleon had embellished his European democratic credentials, stressing the advantages of his common legal code, university and monetary system, 'we would have achieved a single family in Europe. No one would ever have left home while travelling' (Las Casas, 1823, vol.VII, p.228). His attempt was only moderately successful, since the new coinage was added to the existing systems but had no time to replace them entirely. Some frontier areas were an exception -- such as Piedmont, Belgium and parts of Switzerland, where the franc was temporarily abolished following Waterloo -- but had become sufficiently familiar to be reintroduced in 1816, 1832 and 1850 respectively. [6] This was to become the basis for the Latin Monetary Union a few years later.

In 1834 a large number of the 39 German states, including Prussia and Bavaria, agreed to create a free trade area, the Zollverein, followed rapidly by two new regional monetary unions in the south and north, based on the gulden and the thaler. In 1838 a further convention, the M[ddot{u}]nzverein, fixed the exchange rate of the two monetary zones at 1.75 gulden per thaler, creating the first monetary union covering most of Germany. The Union was of a traditional type, based on the silver standard, on independent local issues following common rules, and did not include paper money. A common coin of 2 thalers equalling 3.5 gulden was introduced, but was too cumbersome to become popular; it weighed 37.12 grams and was the heaviest silver coin circulating in Europe at the time. Its failure was sealed by the nickname 'Champagne thaler' (Henderson, 1939). A proposal by Saxony to adopt a single coinage based on the mark was rejected by the other German states wishing to retain the attributes, as well as the substance , of monetary sovereignty.

In 1857 Austria finally managed to become a member of the Munzverein, despite its weaker fiscal and monetary situation and its long-standing depreciated inconvertible paper currency. It had to accept the return to full convertibility into silver of its bank notes and the dominant role of the Prussian thaler in the Union, the Vereinsthaler, at a rate of 1.75 gulden and 1.5 Austrian florins. Prussia had blocked the Austrian accession, as part of its bid for open supremacy over Germany, but Austria still held the presidency of the Diet of the Confederation. Divergent economic conditions and the war of 1859 with Italy forced Austria to suspend convertibility again after only one year. It could not stand the discipline of limited seignorage income. After suffering defeat in the Austro-Prussian war of 1866, Austria was given the opportunity to remain in the Munzverein, but the year after opted out in order to reach an agreement with France. Entering into the LMU seemed to offer access to the Parisian capital market , to a large international currency agreement, and was also part of a new military alliance against Prussia. The French government, however, never ratified the provisional Franco-Austrian monetary convention of 1867, worried by the consequences of Austrian inconvertibility and by the request to abandon bimetallism for the gold standard.

Some monetary historians (Holtfrerich, 1989; Vanthoor, 1996) have described the Munzverein as an almost complete adoption of the thaler throughout Germany, but that was not entirely true. The level of monetary integration was certainly growing, but it had reached a position from which it could not progress any further without defeating the particularist governments of southern Germany. Those governments resisted any attempt by Prussia to impose further monetary harmonisation and played with the French offer to join the LMU in order to keep the thaler proponents at bay (Einaudi, 2000). Behind the thaler-gulden dualism in fact eight different types of currencies persisted, with different divisionary systems, with Hamburg's and Bremen's gold coinage and with a proliferation of uncertain banks of issue. It was out of despair over chaotic domestic circulation and the blocked political situation that many German economists and chambers of commerce turned towards the French leadership for a 'universal coinage' based on the gold standard.

The Latin Monetary Union was the most ambitious, the largest and the longest-serving of all supranational European unions. It influenced the monetary development of over twenty states throughout Europe, Latin America and Africa even if its effective members were never more than five. It was formed with modest aims but then was considered the beginning of universal monetary unification, and finally survived its own decline because member states did not want to pay the cost of its termination.

The LMU was marked by the evolution of bimetallism and the fluctuations of the market price of gold and silver until the 1920s. French 'Bimetallism at 15.5' was a system giving equal capacity to discharge debts legally to gold and silver coins. A fixed relationship between the two metals was established at a ratio of 15.5 grams of silver for every gram of gold. The 15.5 ratio was the official mint price of the two metals in relation to each other. Gold and silver, however, also had a market price determined by their relative scarcity and by the market for jewellery, among other things. Market prices and the official mint price were practically never identical, so that it was always possible to conduct arbitrage operations between coins, withdrawing from monetary circulation the coined metal whose market price was higher than its legal price. Therefore, if gold was relatively scarce and expensive, gold coins would be hoarded by individuals and/or collected by moneychangers or bankers who would melt them into b ars and sell them at market price. In the long run, if one metal appreciated persistently more than another, it would disappear from monetary circulation, to be replaced by the depreciated metal. Given the immense metallic circulation in France at the time, the mint price decided by the French government acted as a magnet for the market price, limiting its fluctuation within narrow margins around the mint price until the system broke down in 1873 (Flandreau, 1995). Nevertheless, many economists at the time argued that bimetallism was unstable, unable to keep both silver and gold coins in circulation and tending to accommodate inflation, and that therefore it was necessary to adopt a single gold standard. Such views were not acceptable to the French administration, concerned with the preservation of what it considered a successful system, minimising the fluctuation of the general price level and placing France as an intermediary between the British gold standard and continental silver currencies.

In the 1850s and 1860s large inflows of gold had reduced the price of gold below 15.5, making silver the appreciating metal, driving silver coins away and creating major problems with small payments. France and her neighbours tried to preserve their silver circulation by reducing the silver content of their coins, in order to eliminate the speculators' profit. The uncoordinated moves of these countries proved ineffective because of the international character of metallic arbitrage which prevented exclusively national solutions to the problem.

The LMU was formed in 1865 by France, Italy, Belgium and Switzerland to overcome the existing differences in subsidiary silver coinage and eliminate speculative flows. The monetary convention agreed between them dictated common rules of issue for gold and silver coins, setting quantitative limits to the minting of high seignorage subsidiary pieces. The coins of each member country could circulate in the territories of the other states of the LMU, but only governmental offices had the legal obligation to accept them (Flandreau, 1994, and Redish, 1993).

By these measures, the French finance ministry intended to encourage travel and frontier trade, prevent the influx of inferior foreign coins into France and preserve bimetallism. It also understood the agreement in the light of the various bilateral free trade agreements signed after the Cobden Chevalier treaty of 1860 between France and Great Britain and of the growing financial weight of Paris. The French foreign affairs ministry took over diplomatic negotiations and expanded the purpose of the monetary convention towards a European monetary union, 'to the great advantage of international relations and of French political influence in the world.' [7]

The Quai d'Orsay instructed a French economist, Felix Esquirou de Parieu, to lead the negotiations, preside over committees and conferences and publicise further the projected monetary union. Parieu was the Vice-President of the Council of State and staunch supporter of the introduction of the gold standard in France. He rapidly developed the project towards a European federalist aim, identifying the need for a single currency called 'Europa', a 'Western European Union', directed by a 'European Commissions to which later on a 'European parliament' should be associated (Parieu, 1875). Monetary union was meant to consolidate peace through commercial intercourse, to reduce transaction costs, exchange rate fluctuations and increase competition. All the arguments and institutions developed after 1950 by the EEC and the EU were anticipated by Parieu, indicating a long-term continuity of problems and solutions to continental European conflicts. The French corps diplomatique did not share and knew little of Parieu's federalist ideas but lent all its influence and organisation to Parieu in order to push though the project.

At first, the prospect of European monetary union did not provoke any major reactions from French monetary authorities (Treasury, Bank of France and Commission des Monnaies) but from 1867 onwards, they all began to oppose it. The Treasury became extremely dissatisfied with the operational developments of the LMU. The LMU treaty ignored paper money, just like all its predecessors, but was a victim of the rapidly changing nature of money, with the growth of banks of issue and of the increasing role of unregulated paper money. All governments involved were under pressure from military needs, or as a result of deeply unbalanced budgets, to generate seignorage income; moreover they could suspend convertibility without formally violating the monetary convention. Non-convertible notes however would rapidly depreciate in relation to coins, and on the foreign exchange market, until convertibility was resumed. The text of the convention was incomplete and unanimity was required to introduce new rules and adapt to chang ing monetary conditions, so that immediate solutions were not available.

Italy adopted non-convertible paper money in 1866 as a consequence of a new war with Austria and of huge budget and trade deficits, so that a large part of its coinage migrated to France. The same thing happened with the Papal States, with the aggravating factor that the papal government, though still only a candidate to join the union, had issued ten times more subsidiary silver coins than the LMU convention permitted. Most of this coinage had been used to pay French troops and circulated in southern France. The Pontifical Secretary of State then notified the French authorities in 1869 that the Vatican could neither sign the convention nor withdraw its debased currency. Pontifical lire had been accepted temporarily by France as a sign of goodwill but became suddenly a source of internal political conflict among Catholic believers (Einaudi, 1997). Further worries came from Greece, which became the fifth member of the LMU in 1868. As a result the French Treasury blocked all new accessions to the convention.

Another reason for the Treasury and the Bank of France's opposition to monetary unification was their commitment to the preservation of bimetallism, threatened by the unanimous vote in favour of the gold standard at the International Monetary Conference of Paris in 1867. The Conference, attended by representatives of twenty countries from Europe, Russia, the USA and the Ottoman Empire, had accepted in principle the idea of monetary unification based on simplified fixed exchange rates with the LMU. Several governments took practical steps to implement the 1867 recommendations, either applying to the LMU or adapting their monetary system, particularly Spain, Austria-Hungary, Sweden, Romania, the Papal States, Brazil and Venezuela. After the Paris conference, a truly European debate took place. Most French, German, British and Italian chambers of commerce were pressing for monetary unification and gold, while private bankers and national banks (Bank of France, Bank of England and Bank of Prussia) argued for the maintenance of whatever metallic standard existed in their own country, against monetary union and for prudence when confronted with utopian projects. The bankers argued that the costs of exchange would not be reduced by union, since they really represented the cost of banking services, of bills of exchange and of bankers' drafts, untouched by the union except in limited cases in which individuals travelled abroad with bags of gold coins.

The debate was particularly lively in Britain, where the Disraeli government immediately rejected monetary union, arguing that the pound was already a suitable international currency. The Conservatives were defeated in the elections by the Liberals and Gladstone formed his first government in 1868. Following the advice of his Mint masters and of the economist William Stanley Jevons, the new Chancellor of the Exchequer, Robert Lowe, declared to the House of Commons in the summer of 1869 that he was considering the possibility of changing the value of the pound, adapting it to the 25 francs coin suggested by the Conference of 1867 (Jevons, 1868). Six months of furious debate followed, with accusations levied against Lowe for attacking the sanctity of the pound and debasing the currency (Bank of England, 1870). Even Gladstone denied his support to the Chancellor and wrote of his 'astonishment' at Lowe's proposal. The European debate became clearer when the internal controversies in the French government were bro ught to light with the continuous obstruction of the Treasury and the vote of the French Senate against the gold standard in January 1870 (Einaudi, 2000). The appeal of the French proposal rapidly declined and was given a final blow when Prussia defeated France at the battle of Sedan in September 1870, exacting an enormous indemnity of 5 billion francs.

The history of the LMU after 1873 is the history of the progressive transformation of bimetallism into a gold standard and of the restriction of the role of the union, with the progressive renationalisation of Italian and Greek subsidiary coinages. New rules were negotiated progressively in the 1870s, stopping the minting of silver, the price of which was falling dramatically as a consequence of the German and Scandinavian decisions to demonetise it. The existing stock of coined silver was not withdrawn, though, because of the excessive cost of the operation and the fear that such a decision might aggravate the decline of consumer prices around the world, which had begun at the start of the 1870s. In the 1880s the rules concerning the exchange of each other's migrated silver currency were also decided. The fall of the market price of silver had reduced by over 30 per cent the market value of the large Belgian and Italian deposits in silver coins held in France at their legal value, guaranteed by the LMU conve ntion. If France had returned these stocks in exchange for gold, it would have imposed severe losses on the allied governments. [8] Therefore the union was continued in order to avoid the considerable costs of dissolution, but also because by the 1890s all the new rules had been accepted, permitting smooth operations with some advantages in transactions and no major inconveniences. The quiet decline of the union was broken only occasionally by the criticism of nostalgic bimetallists and by political tensions between France and Italy, after the latter had shifted its political alliance towards Germany, accompanied by a return to protectionism. The Union was disbanded in 1926, after the disorderly and uneven depreciation of member states' currencies resulting from World War I. When the time came to stabilise national currencies in order to return to the gold standard in the mid-1920s, each country opted for a different policy, with a lower level of cooperation. France chose to keep its currency undervalued to e ncourage competitiveness and avoid Churchill's mistake of restoring the pound to pre-war levels. Fascist Italy opted for a strong and prestigious lira. At that point, disbanding a mere coinage union required only an exchange of letters, without further costs or penalties; silver stocks had already been liquidated during and immediately after the war and the union had ceased for all practical purposes with the declaration of war in 1914.

Compared with the difficult management of the LMU, the Scandinavian Monetary Union (SMU) was initially a resounding success. In 1872 Sweden, discouraged by French opposition to the gold standard and the failure of Parieu's project, abandoned its gold coinage in francs which had been initiated in 1868 after the Paris Conference. It opted instead for a smaller union with Norway and Denmark, based on the gold standard, and a single currency, the crown. The currencies of the three countries in fact already circulated at a simplified fixed exchange rate of 1 Norwegian speciedaler = 2 Danish rigsdaler = 4 Swedish rigsdaler, since the public generally ignored differences of less than 1 per cent (Garelli, 1946). The possibility of adopting the mark as the Scandinavian single currency was discarded due to Denmark's political enmity with Germany, the pound was rejected for its non-decimal character and the franc similarly on account of bimetallism. The Scandinavian position was adopted in spite of last minute efforts b y the Swedish industrialist and banker Oskar, Wallenberg, a friend of Parieu and former Swedish delegate at the Conference of Paris in 1867 (Einaudi, 1998). From 1885 the central banks of the three countries secured the stability of the exchange rates of paper money as well, supplying funds to each other at no cost. Monetary union was progressively extended to bank notes between 1893 and 1901. Subsidiary coinage was not regulated by the convention but no member state over-issued and no problems emerged, since fiscal and monetary policies were balanced in all member states (Henriksen and Koergard, p.94).

The SMU was relatively homogeneous, with similar languages and culture underpinning it. Being restricted to only three states, two of which were linked anyway by a political union (Sweden and Norway), helped to reduce coordination problems. The area was not plagued by wars, and even the Norwegian decision to break political union with Sweden in 1905 was achieved peacefully, though it reduced the level of economic cooperation. Economic integration, however, did not proceed as smoothly as might have been expected. No customs union was agreed and external trade policies diverged progressively so that the share of intra-Scandinavian trade actually declined from 22 per cent of total exports in 1872 to 10 per cent in 1910. Finally, the SMU followed the same path as the LMU as a consequence of the great common shock of World War I. Once fundamental national economic interests were at stake, each state progressively resumed full monetary authority without consultation. Once the gold standard had been suspended, singl e gold crowns were replaced by separate paper crowns and central bank cooperation was weakened. Differentiated currency fluctuations led to the natural extinction of the SMU in the 1920s, without any formal termination of the agreement (Vanthoor; 1996, pp.40-41).

Theories of monetary union and European unification

After the dismissal of the LMU and the SMU in the 1920s, the gold standard resumed only for a brief period, since Britain was forced off it in 1931, followed by other major countries. The former LMU states formed a 'gold bloc' to resist such a change, but in 1936 even France and Italy had to abandon this policy. From then on the terms of reference of discussions on monetary union altered in two major respects.

(1) With fiduciary standards, the role of central banks in monetary management became more discretionary and therefore at the same time both more difficult and more important, highlighting the need for common institutions to manage currency unions and for a larger degree of economic policy coordination. Without commodity-based standards, coinage unions were absolutely meaningless, exchange rate fluctuations increased and some form of coordinating machinery among central banks became necessary.

(2) The issue of monetary union was discussed exclusively in connection with the process of European political integration.

In the 19th century, European federalist ideas had been developed by Saint-Simon in 1814, Victor Hugo had popularised the theme of the United States of Europe in 1848, and the 1860s had seen many French, Germans and Italians advocating a democratic Europe, though without much following (Renouvin, 1949).

The movement for the creation of the United States of Europe or the Federation of European States developed substantially in the interwar period (Stirk, 1989). Several national and international federalist groups began a continuous agitation. The best known of these was the Pan-European League of Richard Coudenhove-Kalergi, who was able to involve an important part of the European political elite, from the French prime ministers Herriot and Briand, to the Czech foreign minister Benes, and the Austrian prime minister (Sainte Lorette, 1955, p.75). Initially the focus was mainly on the creation of a political union, associated with a customs union, but the question of monetary union was developed by several propagandists. In 1928 the French politician, Archer, issued some 'Europa' coins and banknotes for the 'Federated States of Europe' (table 2).

The federalist effort culminated in the speech of the French prime minister, Aristide Briand, to the League of Nations in 1929. 'I believe that some sort of federal link must be forged between people geographically so close, as the European peoples are'. The German foreign affairs minister, Gustav Stresemann, who had shared the Nobel prize for peace with Briand for their common efforts to achieve a lasting reconciliation between France and Germany, agreed, especially on economic grounds, and offered to begin the task with the unification of currencies and mail systems. Stresemann died a few months later and his offer did not survive him. The other European governments reacted negatively to Briand's speech. The British press accused Briand of attempting to break links with the United States, repealing its economic and financial influence through the adoption of protectionist policies by a united Europe. For the

Daily Express, Britain was called to a higher destiny than being part of Europe from an economic or political point of view. According to Churchill, 'for what concerns England, we are with Europe, but not of Europe, we are linked but not comprised' (Sainte Lorette, 1955, p.87; Young, 1998, p.13), while Keynes and the Economist were more positive about Briand's initiative.

The great crisis of the 1930s, followed by the growth of protectionism, nationalism, dictatorships and finally World War II, did not permit further official steps towards monetary unification. The idea that a central bank should be associated to monetary union, however, was developed by the German banker Hans Furstenberg at the Congress of the Pan-European League in 1932 (Vanthoor, 1996). The creation of the Bank for International Settlements in 1930, officially in order to manage the German war indemnities according to the Young plan, reflected in fact a strong need for coordination and exchanges of information between central banks managing the international monetary system. Some of its founders thought of it as the international central bank.

European Monetary union after 1945

World War II reinforced the ranks of European federalists, since many opponents of nazism and fascism identified a united Europe as the only antidote to war and to the fatal myth of absolute national sovereignty. In 1944, the Italian economist Luigi Einaudi emphasised the need for a single European currency and central bank within a federalist framework, to simplify transactions, reduce costs, and especially to deprive national governments of the ability to debase the currency, generate inflation and finance unrealistic budget deficits (Einaudi, 1948).

After the war, European governments showed a new willingness to cooperate closely, initially under US pressure to manage Marshall Plan aid, leading to the European Payment Union (1950). The European Economic Community (EEC) was formed in 1957 by Germany, France, Italy and the Benelux countries, under the Treaty of Rome. The EEC initially had no monetary aspects but in 1958 the European Monetary Committee was set up to discuss member countries' economic and monetary policies. The European Commission, central banks and finance ministries met regularly in what was little more than a policy forum (Bussiere, 2000). The Bretton Woods agreements of 1944 had produced a stable monetary regime, with fixed exchange rates, narrow fluctuation bands and infrequent and limited devaluations. The advantages of a single European currency in such conditions were limited.

In the 1960s, following the liberalisation of capital movements, exchange rates became more difficult to control, the pound was devalued in 1967 and in 1968 the franc came under attack, devaluing the year after. The French government initially responded by reintroducing exchange and import controls but, after general criticism from EEC partners, decided to lift them and attempt instead a greater regional monetary integration. The proposal to expand monetary solidarity and adopt fixed exchange rates associated with the common use of foreign exchange reserves and coordinated economic policies, was initially rejected by the other EEC members with the exception of Luxemburg. Only after the deutschmark came under pressure in May 1969 for a reevaluation did the German position change. The European Commission had clarified the problem in February 1969, with the Barre Memorandum, stating that monetary integration was needed to consolidate the common market and to preserve the Six from external shocks. Despite that, m atters proceeded further only after the politicians sidelined the doubts of technicians on the Monetary Committee and the central bankers of the Committee of the Governors (Bussiere, 2000). The Luxembourg Prime Minister, Pierre Werner, was asked to chair a working group and produced a report in 1970. The Werner report recommended the introduction of economic and monetary union in three phases within ten years, with monetary and fiscal policy coordination and a system of central banks. The ultimate goal was the achievement of European political union. The German and Dutch governments were keen to reinforce European political institutions for such a purpose, but the French government questioned the need to proceed so rapidly towards political integration.

The compromise achieved in 1971 by the European Council included a system of central banks connected to the European Monetary Cooperation Fund, without a final date for the conclusion of the process. In the following months the dollar went off gold and devalued, causing the collapse of the Bretton Woods agreements, reintroducing currency fluctuations. Economic divergence delayed the whole process of monetary union. To moderate currency fluctuations in Europe, the 'Snake' mechanism was introduced in 1972 but was not really successful.

Recent European monetary history is well known and will require only a few words. In 1979 the European Monetary System (EMS) was introduced with fixed but readjustable exchange rates, within narrow margins, and a parallel European unit of account, the Ecu, was created. The EMS succeeded in stabilising progressively the exchange rates of participant countries until 1992. The President of the European commission, Jacques Delors (1985-95), gave a new impetus to the construction of a political Europe with the creation of the Single European Market and further moves towards economic and monetary union. The Delors Report in 1989 (Committee for the Study of Economic and Monetary Union, 1989) provided the framework developed in the Treaty of Maastricht in 1992. The fall of the Berlin wall and the prospect of German unification stimulated a sense of political urgency, with the French and Italian governments pressing the German government to deepen integration as a guarantee against any hegemonic temptations of a newly united Germany. It was the return of the long-term purpose of a continuous weakening of national sovereignty as an antidote to European wars, propagated among others by Saint-Simon in 1814, by Parieu in 1867, by Briand and Stresemann in 1929, by Schuman, Monnet, Adenauer, Spaak and De Gasperi in the 1950s and by Mitterrand and Kohl in the early 1990s.

After three stages of economic and monetary convergence, a European system of central banks would manage the single European currency, the ecu, initially coordinated by the European Monetary Institute and later replaced by the European Central Bank (ECB). The ECB, established in 1999, would be independent and legally barred from financing governments. Its task was to maintain price stability and support European economic policy if this did not conflict with its main objective. Exchange rate policy would be established by the Ecofin council.

The UK entered the EEC three years after the Werner report but kept its traditional attitude towards Europe, resisting further political and monetary integration in an effort to safeguard national sovereignty, the pound and the financial role of the City of London, emphasising its extra-European nature and its special relationship with the USA and the Commonwealth. At every single step British governments attempted to block or delay European integration, refusing to join new initiatives from the beginning but eventually being forced to follow at a later stage (Olivi, 1998). From the monetary point of view Britain joined the EMS only in 1990, then proposed to create a parallel European currency (the 'hard Ecu'), in addition and not instead of the existing ones, and when its proposal was rejected, negotiated an opting out clause from the single European currency.

After the monetary and political crisis of 1992-3 (devaluation of the pound, the lira and other currencies, and a negative vote in the Danish referendum), followed by widespread opposition to EMU, European leaders decided to resist all difficulties and reinforced the structure of the agreement. The single currency was renamed the euro in 1995. To appease the fears of German public opinion and the opposition of some central banks, the indicative criteria of financial convergence set by the Maastricht treaty were interpreted in a restrictive manner, in order to accept into the EMU only those states with balanced fiscal policies. The Stability and Growth pact was added to maintain financial discipline after the introduction of the euro, in order to remove permanently the temptation to seek seignorage income, and to prevent the effects of high levels of debt and inflation from spreading from one member country to the other through the common currency and common interest rate. The political determination of contin ental European governments produced an unexpectedly rapid convergence in inflation, interest rates, and government finances, so that eleven countries qualified for the euro in 1998, while Britain and Denmark opted out and Greece and Sweden did not qualify. The euro was formally launched in 1999, but the general public has not yet seen many practical changes since euro bank notes and coins will appear only in 2002.


The euro is not the first attempt to create a common European currency but it is certainly the most complete, involving the largest number of participants. Unlike most of its predecessors, it has been preceded, and not just accompanied and followed, by intense debates, helping to build an articulate institutional framework. Its robustness will be tested and no doubt the goals, instruments and structure of the institution will evolve with time, just as money and financial institutions have always done. It is important to have the instruments to be able to change and readjust to new situations without traumas and without the excessive resistance of minority interests upheld by using veto powers, especially considering that within 10--15 years EU and EMU members might become as many as 28. The relationship between the ECB and European political institutions will consolidate with experience, because independence does not mean isolation and monetary powers are too crucial to remain completely separate from political and democratic considerations.

The episodes described have shown that national monetary unions in Europe have lasted only as long as centralised governments have been able to maintain national political union. In case of supranational monetary unions, the monetary link is weaker and unions can be terminated without the destruction of a nation state. If the European Union remains as it is, not proceeding towards a federation or a single political entity, the euro will remain a 'temporary' arrangement, which could last twenty years or 200 years but will not be permanent. Monetary unions, however, tend to be rather persistent and dissolve only after very substantial economic or military shocks have created strong divergent political interests.

Political unification followed by monetary unification has usually required a war (see examples from Switzerland, Italy and Germany quoted above) while supranational monetary unions have been the consequence of peace and free trade. Monetary unions alone, however, are not an absolute guarantee of peace and harmony (see, for example, the Austro-Prussian war of 1866 in spite of the Munzverein, the Franco-Italian trade war of the 1890s in spite of the LMU, and Norway's split from sweden in 1905 despite SMU). The political will to maintain a high level of cooperation remains crucial, and needs to be renewed continuously, without excessive confidence in the automatic development of institutional arrangements.

Supporters and opponents of monetary union have not modified their arguments very substantially in the last two centuries, but the outcome of the debate has changed because political and monetary instability in Europe (war, inflation and large exchange rate fluctuations) has become too strong in the 20th century to be acceptable. The ideal continuity of purpose between various generations of intellectuals, businessmen and politicians in favour of a peaceful and united Europe endowed with a common currency could be summarised by Parieu's comment to the French Senate in 1870, during a public debate on monetary union: 'In the history of mankind, the generous utopia of yesterday can become the practical and manageable achievement of tomorrow, because the world has changed. Well! Now Gentlemen, the world has changed'. [9]

(*.) Economic expert of the Presidency of the Council of Ministers, Italy; Research Associate, Centre for History and Economics, University of Cambridge. The views expressed do not necessarily reflect those of the institutions with which the author is connected.


(1.) This article will not deal with micro monetary unions of the 20th century (Belgium-Luxembourg, United Kingdom-Channel Islands, France-Monaco, Italy-San Marina-Papal State or Spain-Andorra) because of the excessively uneven status of participants.

(2.) The royal prerogative of monetary issue included seignorage, but the margin of profit of the sovereign would not count as part of the coin's value abroad.

(3.) Debasement was often followed by monetary reform, increasing again the metallic content of the unit of value, but the operation was conducted at the citizen's expense, without any regularity, contributing further to monetary diversity (Spufford, 1988).

(4.) The main exception to the rule concerned dependent territories not fully part of a centralised state, such as the Lombard- Venetian Kingdom attached to the Austrian Empire or many British or French colonies outside Europe.

(5.) The French Consulate in Frankfurt to French foreign affairs minister Moustier, 12 February 1868, Archives of the Ministry of Foreign affairs, AMAE, ADC 604-I, pp. 77-81.

(6.) In Piedmont the population, accustomed to the franc, refused to return to the old local currency of the 18th century. In Belgium the franc replaced the Dutch gulden as a consequence of the revolution of 1830 and national independence from the Netherlands. The identity of currency rapidly made Belgium dependent on French monetary policy, since the much larger French minting dominated Belgian internal circulation, eliminating Belgian monetary policy autonomy.

(7.) The French finance minister Achille Fould to the French foreign affairs minister Drouyn de Lhuys, 27 January 1866, AMAE,Paris, ADC 603-2, p.1 0.

(8.) In case of dissolution of the union, Italy for example would have received 300 million silver lire from France in exchange for 300 million gold francs. Theoretically Italy could have reintroduced those Italian silver coins in its domestic circulation at face value without any loss, but that would have meant returning to a dominant silver circulation, abandoning the long standing ambition to achieve a gold standard. At that point the silver standard was associated with inflation and political weakness. In order to avoid such a calamity, Italy would have had to demonetise those 300 million silver lire and obtain gold for them, the Italian government would have been forced to go to the market and pay the 30 per cent premium for gold and against silver.

(9.) 'De'bat au Senat sur les modifications au systeme monetaire francais', Annales du Senat et du Corps Legislsatif session of 1870, vol.1, 25 January 1870, p.302.


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 Supranational monetary unions in Europe
Period Name Countries involved
1379, Hanseatic monetary Lubeck, Hambourg,
renewed league (Wendische Lunenburg, Rostok,
1502-90 Munzverein) Stralsund and Wismar
1386, Monetary federation Koln, Hesse-Cassel,
renewed of the Rhein Hesse-Darmstadt,
1572-90 (Rheinischer Hesse-Marburg, Hesse
 Munzbund) Reinfels, Mainz, Palatin,
 and Treveer
1566 South German Twenty south German
 monetary convention states.
1753 Germanic monetary Austrian Empire, Bavaria
 union and other German states
 (without Prussia)
1808-14 French empire and France, continental Italy,
 satellites Belgium, Netherlands,
 parts of Germany
 and of Switzerland
1838-57 Munzverein I, German German states belonging
 Monetary Union to the German customs
 union (Zollverein)
1857-71 Munzverein II, Austro- German states of the
 German Monetary Zollverein and Austria
 Union for 1857-67
1865-1926 Latin Monetary Union France, Italy, Belgium,
 Switzerland and Greece
1872-1931 Scandinavian Monetary Sweden, Norway and
 Union Denmark
1999-? European Monetary Germany, france, Italy,
 Union Belgium, Netherlands,
 Luxembourg, Austria,
 Finland, Ireland, Spain
 and Portugal
Period Common central banks, Specific characters
 common paper currency
1379, No central bank nor Common but not single thaler
renewed paper money. unit, issued separately by each
1502-90 city, sometimes with common
1386, Idem Common but not single
renewed thaler unit.
1566 Idem Simultaneous circulation of
 northern thaler and southern
1753 Idem Common but not single
 thaler with fixed exchange
 rate to the gulden.
1808-14 Idem Based on the bimetallic franc
 germinal with a 1-to-1
 exchange rate with lira and
 and frank. No common symbols.
1838-57 No central bank, Common thaler of the north
 decentralised issue of paper with a 1-to-1.75 fixed exchange
 currency not included in the rate with the southern gulden.
 convention. Silver standard.
1857-71 Idem, no central bank until Previous arrangement extended
 national political monetary to Austria.
1865-1926 Bank notes not included. Multiple currencies with a
 Central role of the Bank of fixed-to-1 exchange rate. No
 France remains informal and common sumbols. Initially bi-
 not neutral. metallic, evolves towards gold.
1872-1931 No common central bank Sincle currency (crown) minted
 but intense cooperation. nationaaly, gold standard but
 Bank notes included in the with a dominant paper
 union from 1901. circulation.
1999-? European Central Bank Common and single currency,
 controls monetary policy the euro. National symbols on
 and note issue from the the coinage. Purely fiduciary
 centre. standard. Coordination of fiscal
 policies (stability and growth
Sources: Data for the tables comes from
the publications quoted in the text.
 Number of currencies circulating in Europe
1789 200
1815 81
1850 61
1871 18
1920 28
1950 26
1995 37
1999 28
Source: Author's calculations from World Coin Catalogue for the 18th,
19th and 20th centuries. Values before 1850 are approximate. Totals do
not include Andorra, Monaco, Liechtenstein, San Marino and the Vatican.
 The intellectual case for European monetary unification
Date Author-Body Nationality and Occasion
1582 Gaspare Scaruffi Italian mint master Treatise on the Italian mints.
1612 Juan Marquez Spanish monk, Treatise on Christian
 preacher of Philip government.
17?? Hegewish German professor Academic work.
 (1760-1815) from Kiel
1866-70 Felix Esquirou de French politician Creation of the Latin
 Parieu, Charles and economist, Monetary Union in 1865
 Feer Herzog Swiss politician and International Monetary
 and others and industrialist Conference of Paris in 1867.
1895 Raphael Georges French Academic Apparent failure of the LMU.
1928 Louis Archer French engineer Proposed Federation of
 and politician European States.
1930 Aristide Briand French and German Briand's speech to the League
 Gustav politicians of Nations for a European
 Stresemann politican entity.
1932 Richard European activist Congress of the Pan
 Coudenhove and German European League proposals
 Kalergi- Hans commercial banker for a European Federation.
1944 Luigi Einaudi Italian economist Campaign to create a federal
 and politician Europe after the end of
 World War II.
1969-70 Raymond Barre French politician Barre Memorandum and
 and Pierre and economist and Werner report, following
 Werner Luxembourg the monetary tensions leading
 politician in 1971 to general currency
1989 Jacques Delors French politician Delors report, to integration
 and others after the completion of the
 Single Market and capital
 movements liberalisation.
Date Content of the proposal
1582 Harmonise the intrinsic content of gold and
 silver coins and rules of issue to achieve a
 universal standard.
1612 An agreement of the monarchs through their
 ambassadors to adopt the same standards of
17?? Universal money to encourage trade and simplify
 travel. Monetary convention between European
 nations to adopt a single gold standard, abolish
 seignorage and work for general peace.
1866-70 A 'Europa' coin based on the gold standard and
 fixed irrevocable exchange rates. [pounds]1=$5=10
 florins=25 francs, lire, pesetas, drachme, etc.
 Would facilitate trade, reduce transaction costs,
 increase competition and favour peace.
1895 Universal currency with a universal central bank
 in Bern.
1928 The unit would be the `Europa' (proof coins
 and notes issued).
1930 Customs union and monetary union.
1932 Introduction of a European currency and a
 European Central Bank.
1944 Creation of a single European currency and a
 single European bank of issue.
1969-70 Economic and monetary integration in three
 steps after ten years, concluded by a single
 currency, moneatry and fiscal policy co-
 ordination, a federal system of European central
 banks and a European Monetary Cooperation
1989 Single currency after ten year process in three
 stages, with a partial centralisation of budgetary
 policies and a total centralisation of monetary
 policies. Independent European System of
 Central Banks aiming at domestic price stability.
 National monetary unifications following
 political unification
Period Name Territories Type of union
1850 Switzerland All 22 Swiss cantons Enforced after a short civil
 which previously war between the central and
 issued separate local government,
1862 Kingdom of Italy Initially six Italian Enforced after several wars
 states, followed in of unification.
 1866 by Venetia
 and in 1870 by
1871 German Empire All German Enforced after two wars
 principalities, king- (Prussia against Austria and
 doms and free the rest of Germany in 1866
 cities, with the ex- and against France in
 clusion of Austria. 1980-71)
1919 Kingdom of Serbia, Montenegro, Voluntary, followed the con-
 Yugoslavia and former Austrian clusion of World War I and
 territories of the end of the Austro-
 Bosnia-Herzegovina, Hungarian Empire.
 Slovenia and Croatia.
1919 Poland Russian, German Voluntary, followed the con-
 and Austrian conclusion of World War I
 Polish territories, and the end of the three
1945 USSR USSR and Baltic Predatory, after the Second
 states. World War.
1990 Germany East Germany and Voluntary, followed the
 West Germany. collapse of the Communist
Period Central banks, paper currency and other
 specific characters
1850 Introduction of a single common currency but
 with several banks of issue and no central
 bank until 1907. Followed the reinforcement
 of existing federal arrangements.
1862 Banca Nazionale nel Regno d'Italia in 1861,
 transformed into the Bank of Italy in 1893.
 Bank notes issued by six different private
 banks of issue.
1871 The Prussian Bank became the Reichsbank in
 1876 and central bank note issue. German
 states within the Empire retained the right to
 issue coinage with a common imperial crest
 alongside the local ruler or city symbols.
1919 In 1920 the National Bank of Serbia became the
 National Bank of Yugoslavia, using the Serbian
 dinar as common currency. Entirely unified
 currency and coinage, with unfavourable
 exchange rate for former Austrian territories.
1919 The new Polish mark, linked to the German
 mark, was destroyed by hyperinflation in 1924,
 while francs and dollars constituted the real
 currency. The Bank of Poland was created in
 1924, together with the zloty, equal to a Freh
 gold franc.
1945 The Soviet ruble was extended to the
 new territories.
1990 The Bundesbank extended its functions as
 central bank to the new Landers. I-to-I
 exchange rate decided at political level.
 Political separation followed by
 currency proliferation
 Initial State
1831-1919 Ottoman Empire (kurush)
1918 Russian Empire (ruble)
1919 Austro-Hungarian Empire
1991-99 Yugoslavia (dinar)
1991 USSR (ruble)
1993 Czechoslovakia (koruna)
 Successor currencies
1831-1919 Greek drachma (1831), Romanian lei (1867),
 Serbian dinar (1868), Bulgarian lev
 (1880), Montenegrin perper, Albanian lek (1926).
1918 Estonian kroon, Lithuanian litas, Latvian
 lats, Finnish markaa, Polish zloty and Soviet
1919 Austrian shilling, Hungarian pengo, Czechos-
 lovak koruna, Yugoslav dinar, Italian lira,
 Polish zloty and Romanian lei.
1991-99 Slovenian tolar, Croatian dinar, Bosnian
 convertible markka, Yugoslav new dinar,
 Macedonian denar, followed by the official
 adoption of the Deutschmark as parallel
 currency in Kosovo and Montenegro in 1999.
1991 Russian ruble, Armenian dram, Azeri manta,
 Belarussian ruble, Estonian
 kroon, Georgian menati, Kazakh tenge,
 Kirghiz som, Latvian lats,
 Lithuanian litas, Moldavian leu, Turkmen
 manta, Ukranian karbovanets,
 Uzbek som.
1993 Czech koruna and Slovak koruna.
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Author:Einaudi, Luca
Publication:National Institute Economic Review
Geographic Code:4E
Date:Apr 1, 2000
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