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chosen to spend Germany's trade
surplus-the fruit of its economic
strength-on financing the further
unification of Europe and increasing
his country's diplomatic authority
within Europe and abroad.. .."
The powerful political impact of
the German leader's decision on the
monetary plan was also noted in
this same
Times
dispatch: "The real
issues at stake are as much política!
as economic. A disciplined Euro–
pean monetary bloc, underpinned
by the Common Market's reserves,
would provide the basis for a single
European currency that could even-
tually take over much of the dollar's
role as an international medium of
exchange....
"The independent line West Ger–
many is starting to take in foreign
affairs acquires wider significance
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against the background of the
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United States' fading world hege-
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The.National Debt:
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Closing
in
on
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Onelrillion
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The National Debt has dou–
bled in the last nine years.
At the curren! rate of in–
crease. it will double agaln
in another five.
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100 SIL.
mony and Europe's increasing pros-
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perity. It is yet another sign that the
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balance of power and influence
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within the West is shifting."
6L-----------------------------....J
Protectlng the Mark
The Germans will be, by far, the
biggest single contributor to the
monetary pool. The normally pru–
dent Germans are willing to make
this commitment for a solid self-in–
terested reason. Reports
Business
Week
magazine, July 31, 1978: " For
Germany, setting up a currency
union based around the mark is a
way of protecting its export com–
petitiveness. lf the European cur–
rencies ftoat collectively against the
dollar, any decline in the dollar that
pushes up the mark would also push
up the franc, the guilder, and the
other currencies of Germany's Eu–
ropean trade partners. Germany
would thus retain its com–
petitiveness at least within Europe,
which absorbs half of its exports.
More important, Germany could
dictate conservative fiscal and mon–
etary policies to Europe by control–
ling the new fund."
The French, and others in the
monetary union, will be able to
have access to the 18 billion marks
(about $9 billion) in the pool-but
for a price: They will have to get
their economies in shape, reducing
The
PLAIN TRUTH October-November 1978
their inflation rates to the low Ger–
man leve!.
And with al! the currencies in Eu–
rope floating in concert against the
dollar, what will happen to the dol–
lar? The
Business Week
article sug–
gests: "For the U.S. , the proposed
currency union can only spell more
trouble for the dollar ... the fund
will openly advertise that it has 18
billion marks available to anyone
wanting to dump dollars.... And
once the ECU becomes a reserve
currency, that, too, will be bought
for dollars."
The
Business Week
article con–
cluded soberly by adding: "Unless
the European challenge is met by
radical changes in U.S. fiscal and
monetary policies, the long-term ef–
fect on the dollar will be to send it
the way of sterling."
Thus, instead of halting the de–
cline of the dollar-one of the offi–
cial reasons for launching the
ECU-a new, stable, much desired
European currency, heavily backed
by gold (which is steadily increasing
in value) and deutsche marks could
send the dollar reeling to unheard–
of depths!
1t
makes one wonder what hap–
pened to those monetary experts in
the United States who thought that
gold was simply a "barbarie relic," a
leftover from the Middle Ages. and
who advocated periodic sales of the
U.S. gold supply to demonstrate
"confidence" in the dollar. Nearly
al! the gold from these sales. in–
cidentally, has ended up m the
vaults of Europe's central banks.
These banks now hold in reserve
half of all the world's monetary
gold-18,000 of the 36,000 metric
tons. Only 9,000 metric tons remain
in U.S. Treasury hands.
Brltaln at the Crossroads
lt
is not only the United States
which is being forced to look down
the barre! of a loaded economic
gun. The sudden swelling support
for a European Monetary Union
has clearly come at a bad time for
Britain as well. Public support for
the Common Market has dropped
to its lowest leve! ever in Britain.
Many experts feel that the mone–
tary plan represents an unaccept–
able compromise of prized British
sovereignty. Yet not to join could be
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