Machtgegensätze in einer Währungsunion

Abstract

Power Conflicts in a Monetary Union. An historical example

The Vienna Coinage Convention was concluded in 1857 by Austria, Prussia and most of the other German states. They formed a monetary union with a common currency unit, the “Vereinsthaler” (union thaler). In addition to this unit, however, the coins of the individual states remained in circulation. The parity of these various currencies was governed by the common silver standard. The conclusion of this agreement must be considered in close relationship with the rivalry for political power between Prussia and Austria, and constitutes an integral part of the struggle for predominance in Germany. It must therefore be understood as the expression of a short-term, highly unstable balance of power in which the struggle for the German states standing between the two rivals was still undecided. However, the Vienna agreement embodied the elements of a renewed dynamification. The thaler, the currency of Prussia and other central and north German states, enjoyed a special status among the other currencies. This practically had to result in its over-valuation as compared with the south German florin and, of necessity, in persistent silver losses for that florin’s area of circulation. Sooner or later, the affected states had no choice but to join the thaler area and thus make at least a partial decision in favour of Prussia. The agreed monetary system was therefore by no means neutral in economic and political respects, but constituted in fact an instrument of power politics. As a further conclusion of this case study the following must be emphasized. The system of the Vienna Convention, which by means of the silver standard subjected interstate monetary relations to automatic regulative mechanisms to a great extent, did not fulfül one expectation which is nowadays associated with the closely related control by formula. That is, it was by no means capable of forcing all member states to practice monetary discipline; on the contrary, the breaking out of one partner put it in a presumably hopeless situation.