Legal monetary sovereignty rarely yields true economic currency sovereignty
Evidence
As explained by Katharina Pistor, professor of law at the Columbia Law School in New York, a twenty-first-century state is truly sovereign only to the extent that it has its own sovereign currency. That said, if many countries have their own national currency and therefore enjoy monetary sovereignty in the legal sense, very few can be said to have currency sovereignty from an economic point of view. This is due to the fact that they have not reached financial independence, as evidenced by the fact that they continue to borrow in foreign currency and on the basis of foreign law. In fact, a state that depends on foreign currency-denominated external financing to solve its balance of payments problems is not able to conduct an autonomous economic policy, even if it has its own national currency: the funds it receives are often accompanied by conditionality clauses that limit its autonomy. For example, most African countries that have their own national currency, such as Ghana, Angola or Mozambique, depend on IMF funding and are forced to manage their currency and budget according to the requirements of the Bretton Woods institution. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 364 (
#corroborates, via linked claim)
The heart of this device – based on recognising the former colonies’ formal rights that they were prevented from enjoying in practice – was the currency. … The economic and monetary agreement collectively signed by the Central African Republic, the Republic of the Congo and the Republic of Chad, for example, stated: ‘The states of equatorial Africa confirm their membership of the monetary union of which they are members within the franc zone.’ Article 16 established that ‘all the revenue and expenditure operations of the states of equatorial Africa will be made via the transfer or purchase of foreign currency on the Paris foreign exchange market’. This meant, as explained in the following chapter, that these countries were obliged to deposit their foreign currency in a special account at the French Treasury and to pass through the Paris foreign exchange market in order to carry out their transactions with foreign countries. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 87 (
#exemplifies, via linked claim)
According to Katharina Pistor, only the United States, Britain, Japan, China, Canada, Australia and Switzerland can today be considered truly monetary sovereign countries, in the sense that they have a currency with a flexible exchange rate and generally borrow only in their own currency. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 364 (
#expands, via linked claim)
Categorization
- XREF: connects to: Currency independence alone cannot succeed without a self-centred development model; A sovereign-currency state can never become insolvent in its own currency; Currency issuance is inseparable from national sovereignty (+7 more)
Related
- Legal currency ownership does not confer economic monetary sovereignty. (similarity 0.94)
- Currency issuance is inseparable from national sovereignty (similarity 0.92)
- No state with over 100 million people lacks its own national currency (similarity 0.91)
- A sovereign currency makes a state incapable of defaulting on its own obligations (similarity 0.90)
- Only seven countries hold true monetary sovereignty today. (similarity 0.88)
- The currency was the core mechanism of French control despite formal sovereignty. (similarity 0.86)
- A sovereign-currency state can never become insolvent in its own currency (similarity 0.84)
- France uniquely maintained its currency in politically independent countries (similarity 0.83)
- Monetary sovereignty is a precondition for capital accumulation and full employment (similarity 0.83)
- A sovereign currency makes state insolvency in that currency impossible. (similarity 0.82)
- Currency independence alone cannot succeed without a self-centred development model (similarity 0.81)
- Monetary sovereignty let Nigeria avoid IMF subordination where franc-zone states could not (similarity 0.81)
- Monetary sovereignty let Nigeria escape IMF where CEMAC states could not (similarity 0.80)
- No franc-zone state dared request monetary independence, leaving France’s influence intact (similarity 0.80)
- Pouemi classified African currencies into four levels of monetary sovereignty. (similarity 0.80)
Broader Connections
- Legal currency ownership does not confer economic monetary sovereignty.
#corroborates(0.95) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 364 - The currency was the core mechanism of French control despite formal sovereignty.
#exemplifies(0.70) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 87 - Only seven countries hold true monetary sovereignty today.
#expands(0.50) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 364