Nick Cohen wrote an interesting comment in last Sunday’s Observer about the current Euro currency crisis:
The notion that you could have a central bank without a central government to control it and impose a uniform interest rate on divergent economies is [now] ridiculed everywhere. [But previously] In the minds of European politicians, opponents of European federalism were not mistaken or confused but wicked […] there were no debates where challenges might be made, and, more seriously, no contingency plans.
This set off memories about reporting from Prague on the break-up of Czechoslovakia in 1992, where a hard currency lesson was being learned in reverse. If they weren’t going to have a common, central government and – most importantly – a common economic policy – then all the logic pointed to separate currencies, and soon. I wrote:
Czech and Slovak leaders have promised to share the present crown as long as possible. But the smart money is on an early split, and the state bank has already commissioned a new set of exclusively Czech banknotes, ready for summer delivery. If crisis hits before the crisp new notes are ready, the authorities are prepared. If the money speculators move in, or if Prague and Bratislava diverge too strongly on economic policy, they will put a special Czech stamp on old notes and change over the entire currency within two days.
If you are interested in reading more, check out Story #2 on the new Archive page. By the way, the banknote above is 100 Crowns in the old money, from the days of the Czechoslovak Socialist Republic, complete with triumphant worker and peasant.