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DOLLARCRISIS
(Continued from page 6)
would prefer to get its money sorne
other way will not earn us the good
opinion of mankind; it will get us a
reputation as chiselers. And ... we
can't get away with it much longer."
Enter the ECU and Prophecy
Author Mayer also predicted that
sooner or later the world's major
trading nations would have to find a
way to spread the reserve function
of the dollar around a group of
other currencies.
This new method-coming much
sooner than Americans realize-is
already on the drawing boards.
One week before the Bonn sum–
mit, at a conference of Common
Market heads of government in Bre–
men, West Germany, Chancellor
Schmidt unveiled his plan for a
"zone of currency stability" in Eu–
rope. Cosponsor of the scheme is
France's Presiden! Valéry Giscard
d'Estaing.
The Bremen agreement calls for
each country joining the European
monetary system-which will also be
open to countries outside the Com–
mon Market (such as Sweden, Swit–
zerland and Norway)-to place 20
percent ofits gold and dollar reserves
in a central pool which will be de–
nominated in "European currency
units," or ECUs. The ECU's value
will be close to that of the dollar but
will not fiuctuate like the dallar.
In addition to this pooling of gold
and dollars, each country will add a
comparable sum of its own cur–
rency- francs, marks, pounds, lire,
etc. - to the central reserve, which
could then have at its disposal
something like $50 billion- more
than the reserves of the In ter–
national Monetary Fund.
According to the thinking at
Common Market headquarters, the
major features of the ECU plan, if
approved at the December Com–
mon Market summit conference in
Brussels, could be put into force as
early as this coming January l . And,
as the
Wall Street Journal
of July
12, 1978, adds, "As early as five
years from now, predict the most
42
optimistic aides, the Common Mar–
ket could be ready for work on a
single European currency to replace
the existing national currencies,
right down to actual paper money
and coins."
lmpact of Schuman Plan
.,
Don Cook, París corresponden! for
the
Los Angeles Times,
was quick to
recognize the awesome import of
the new monetary scheme. He lik–
ened it in scope to the Schuman
Plan of 1950 which launched the
European Coa! and Steel Commu–
nity, forerunner of today's nine-na–
tion Common Market. Reported
Cook: "By agreeing to create a new
"A disciplined European
monetary bloc ... would
provide the basis for a
single European currency
that could eventually
take over much of the
dollar's role as an
international medium
of exchange."
New York Times
July 30, 1978
European monetary system, the
Common Market heads of govern–
ment took what will probably turn
out to be the greatest leap forward
in European unity since the Schu–
man Plan of 1950."
Cook noted another parallel to
the historie Schuman Plan. "Again,"
he said, "it is the result of a con–
vergence of the interests of the two
nations that are at the heart of
everything European-West Ger–
many and France."
And again, Cook also noted, the
British were upstaged by the bold
German-French strategy and had
reservations about joining in. Said
Cook: "Whether Great Britain de-
cides to join or not, France and West
Germany clearly will go ahead with
the monetary scheme. Britain is
therefore in much the same position
as when the Schuman Plan was
adopted in 1950. Britain stayed out,
and then took 20 years to join Eu–
rope."
Collar Skid Forced the lssue
lt
is known that Herr Schmidt was
originally quite cool to the ECU idea.
When Britain's Roy Jenkins, present
head of the European Commission
and a leading exponent of the idea,
again brought up the concept of a
common monetary system at an EC
summit in Copenhagen in April,
Schmidt still had his doubts.
In the succeeding months, how–
ever, Schmidt, witnessing the una–
bated slide of the dollar and the
inexorable upward pressure on the
0 -
mark, changed his mind. At a secret
meeting in Hamburg in June, the
chancellor and the French presiden!
agreed in principie on the. new mone–
tary a lignment and arranged to
jointly push for it at the Bremen
conference. (British Prime Minjster
James Callaghan has criticized the
secrecy in which the plan was devel–
oped between Franceand Germany.)
In Bonn the Germans and French
briefed the American delegation on
the outlines of the monetary union,
stressing that it was not intended as
an anti-American gesture but that it
had been given great ímpetus be–
cause of the dollar's decline. Presi–
dent Carter was noticeably cool to
the whole idea and declined to give
it his endorsement.
American reserva tions or not,
Bonn and París have set their course
resolutely. And the Germans, espe–
cially, are flexing sorne diplomatic
muscle to correspond with their eco–
nomicstrength. A dispatch in the
New
York Times
of July 30, 1978 , made
this new fact of history abundantly
clear: "President Carter and other
Western leaders wan ted him
(Schmidt] to expand the German
economy raster than he considered
prudent, sucking in more imports,
boosting world trade but risking re–
newed inflation. Mr. Schmidt refused
to do this, offering only a modest
stimulus.... Instead, he had already
The
PLAIN TRUTH October·November 1978