The Euro at 10 - A historical analysis

By David Marsh - published by the European Association for Banking and Financial History 

A currency for Europe is a design long in its pedigree, enrapturing in its endeavour. The dream of a common unit of money to invigorate and unify disparate peoples, and imbue national economies with wealth and dynamism, has sporadically captured attention throughout centuries of political thought. The search for the monetary equivalent of the Holy Grail has frequently been tinged with idealistic fervour, co-existing with a strong dose of political and economic self-interest. George Podiebrad, a fifteenth-century king of Bohemia, suggested a European Federation that would issue a common currency for use by a European armed force raised to fight the Turks.

Napoleon I advocated a common European money to advance trade – under French leadership. Nineteenth-century philosopher and political economist John Stuart Mill believed that the march of human progress through ‘political improvement’ would eventually encourage the adoption of one world currency. Victor Hugo bracketed together a single European currency with his vision of a United States of Europe in benevolent co-existence with the United States of America.

Walther Funk, Hitler’s Second World War Reichsbank President, saw the Reichsmark as the new currency for Europe – with Berlin supplanting London as the natural financial market centre. The concept of a united Europe was close to the hearts of the post-war rebuilders of the continent. Winston Churchill’s 1946 speech propounding a ‘United States of Europe’ was however frequently misunderstood, for Churchill had no intention that his own country should join the club. During the 1950s, Jacques Rueff, a one-time wartime Banque de France official who became a distinguished adviser to President Charles de Gaulle, famously said money would pave the way for European integration: ‘L’Europe se fera par la monnaie ou ne se fera pas’ – ‘Europe shall be made through the currency, or it shall not be made’. Rueff’s declaration demonstrated support for common principles of monetary stability rather than early advocacy of a single currency – but as a rallying cry it was destined to echo down subsequent decades. Download full article

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