Chapter 8: The Financial Roots of European Integration ...Trade had been growing rapidly...However, in other respects economic integration proceeded slowly. In agriculture the development of an integrated market was hindered by the persistence of national subsidies until a Common Agricultural Policy superseded these. In manufacturing, too, national governments continued to resist...markets were not being integrated because they were not really being liberalized. Such practices were less frequently adopted in the case of services, but only because services in those days were less easily traded across national boundaries even under conditions of perfect free trade. The exception to this rule was financial services, one of which - the sale of long-term corporate and public sector bonds to relatively wealthy investors - became integrated in a quite novel way... ...National governments with few exceptions remain wedded to capital and exchange controls. The development of the Eurobond market was thus a largely spontaneous result of innovation by private sector actors, with some help from Britains permissive monetary authorities. Within a few short years, the genesis and growth of this market transformed the European financial system, forging entirely new institutional links and networks across national borders. Nevertheless, it remains a largely unwritten chapter of post-war European history, rating literally no mention at all in most recent textbooks on the subject... ...the providers of international reserve currencies had to run balance of payments deficits in order to supply the world with their currencies, but in so doing their currencies became vulnerable to crises of confidence...
Posted on: Sun, 25 Jan 2015 13:04:08 +0000
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