The stolid and
trustworthy Bundesbank succeeded the Reichsmark and the Union was
finally vanquished only by the bureaucracy in Brussels and its euro.
This is the only case in history of a successful monetary union not
preceded by a political one. But it is hardly representative. Prussia
was the regional bully and never shied away from enforcing strict
compliance on the other members of the Federation.
It understood the paramount importance of a stable currency and sought
to preserve it by introducing various consistent metallic standards.
Politically motivated inflation and devaluation were ruled out, for the
first time. Modern monetary management was born.
Another, perhaps equally successful, and still on-going union - is the
CFA franc Zone.
The CFA (stands for French African Community in French) franc has been
in use in the French colonies of West and Central Africa (and,
curiously, in one formerly Spanish colony) since 1945. It is pegged to
the French franc. The French Treasury explicitly guarantees its
conversion to the French franc (65% of the reserves of the member
states are kept in the safes of the French Central Bank). France often
openly imposes monetary discipline (that it sometimes lacks at home!)
directly and through its generous financial assistance.
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