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Brief Lives: Currency and Nationalism in Modern Europe
From: The British Museum
| By:
Andrew MeadowsJonathan Williams |
EDITOR'S INTRODUCTION |
How should Europeans feel about abandoning their national currencies for the Euro? Are the lira, the franc and the deutschemark deeply held symbols of national identity, or merely pragmatic inventions of the modern nation state?
Jonathan Williams and Andrew Meadows, curators of a major exhibit held at the British Museum in February 2002 on the history of European currencies, put Europe's adoption of the Euro in focus. European currencies have had different political associations and different life spans, and attitudes in Europe are clearly qualitatively different than those of the British toward the sterling, or indeed, the Americans toward the dollar. |
 ow old is the British pound? An apparently innocuous question leads us into some very muddy waters. What precisely do we mean by the British pound, or sterling? If it is the pound of a hundred pence, then it is only a generation old: the youngest of all of western Europe's currencies, born in 1971. Or the decimal pound coin? Even younger, no earlier than 1983 (though the first pound coin was made as early as 1489). Or what about the pound note? Even this is not a great deal older: the first regular issue of modern Bank of England pound notes did not appear until 1928 (though again there had been #1 notes during the Napoleonic period because of the gold-shortage). Or do we in fact mean the good old pound of l.s.d. fame? This is indeed rather older, dating back over 1200 years to the eighth century AD. But it is not at all exclusively British, as it was created by the Carolingian kings of what is now France, Germany and Italy. Nonetheless, the venerability conferred by age, and indeed our very uncertainty about its origins, combine to give the British pound the air of traditionality that makes it such a potent symbol of our national sovereignty. But for most if this period the pound was a notional thing, a unit for reckoning money rather than a coin or a note. |
It is in good measure this love of the pound that makes what is currently happening to the currencies of our European neighbours so bewildering to British eyes. The éclat with which the French, Germans, Italians, and Spanish (to name but four of the twelve) are giving up their franc, mark, lira and peseta catches us by surprise. One is haunted by the suspicion that the strongest twinges of nostalgia for these disappearing old friends will be felt not by those whose currencies they were, but by British tourists holidaying among them. Foreign currency is, after all, the most in-your-pocket, tangible sign that you are in a foreign country. |
There are, however, two important facts about the currencies of our neighbours to bear in mind as we begin to ponder the willingness of other Europeans to give up such potent symbols of their nationhood. First, none of the currencies that are about to disappear from Europe are very old. Second, and as a consequence of the first, they all have traceable, definable beginnings, originating in deliberate government acts. How is it that the Europe's currencies are so different from ours? |
Most of Europe's currencies are legal creations of the modern era of the nation state, heralded by the French Revolution. In the nineteenth century new countries came into existence throughout Europe, achieving independence (e.g. Greece in 1829, Belgium in 1830, Norway in 1905, Ireland in 1937 ) or unity (Italy in 1861, and Germany in 1871), and gradually forming the political map of Europe as we know it today. Just as in contemporary Eastern Europe, one of the first acts of these new, legally established communities was the creation of a new national currency. |
Arguably the oldest of the national currencies of the Eurozone is the French franc, though its revaluation in 1960 when 100 francs were made equivalent to 1 NF might undermine its claim to priority. Nevertheless, in marked contrast to the British pound we can identify the precise point in time at which the French franc came into being. Article 5 of the law passed on 18 Germinal, Year III of the Republic (7th April 1795), states quite specifically: |
Enfin, l'unité des monnaies prendra le nom de Franc, pour remplacer celui de Livre usité jusqu'aujourdhui. |
In terms of its weight in silver it was a successor of the old royal currency, the livre (pound), and the word 'franc' had long been used colloquially to mean 'livre'. But the fact that it was decimal marked a clear break, and it was meant to be a new currency for a new nation. |
Revolutionary France passed quickly into the Napoleonic Empire. The fall of the latter with the defeat of Napoleon created, or reformed, several new states, including in 1815 the Kingdom of the Netherlands which (re-)adopted the guilder as its currency. Guilder ('gulden' in Dutch) had long been a currency name and a coin in the Netherlands. But the guilders of the new Dutch state were, like the French franc, decimalised, and issued in the name of the king rather than those of the various regions that had gone to make up its previous incarnation, the United Provinces of the Netherlands. Out of this new kingdom was born another, Belgium, when in 1830 the southern, largely francophone and Catholic provinces of the south achieved their independence from the Dutch-speaking Protestant north, and adopted the franc as the name for their national currency. They were followed some years later in 1848 by Luxembourg which switched from using guilders to francs in its accounts (Belgium and Luxembourg have actually been in a monetary union since 1921, their currencies being of the same value and interchangeable, but apparently it can be difficult to spend your Luxembourg francs in Belgium). The same period saw the Greeks break free from Ottoman Turkish rule. In 1833, after a brief republican interlude, they received a Bavarian prince called Otto as their king and adopted the drachma as their currency. Like the shekel, the currency of the modern state of Israel, the choice of drachma represents the antiquarian retrieval of a monetary term from the ancient history of the nation. New nations often need to give themselves a sense that they have old roots. |
The decade or so after 1860 saw the birth of four of Europe's national currencies. In 1860 Finland was granted the right to its own currency, the markka. Though Finland remained within the Russian Empire for the moment, this was a clear presage of the full independence that would follow in 1917. The proclamation of King Victor Emanuel II of Sardinia as King of a united Italy in 1861 did away with the plethora of local currencies in circulation within the states of Italy, replacing them with the lira as the national currency, while in 1869 Spain instituted a monetary reform which introduced the peseta as the principal denomination. Both these currencies were from the outset closely linked to the French franc. The first peseta and lira silver coins were the same weight and contained the same amount of silver as the franc. |
Perhaps most significantly, however, the establishment of the German Empire in 1871 led to the birth of the mark. There were no fewer than six different monetary systems in use among the twenty-five states of pre-imperial Germany. These were all superseded by the mark, an ancient monetary term that had survived as the currency unit of the two free cities of Hamburg and L|beck in the north. 1948, though, is the birth date of its most successful incarnation as the D-mark (short for deutsche Mark, simply meaning "German mark". The word "deutschmark" is an English invention). Introduced within West Germany by the Allies after World War II, the stability of the new currency has been the most potent symbol of Germany's post-war economic miracle and political reconstruction, as of its reintegration into Europe and the West after the disastrous era of the Third Reich. Germans of that generation still vividly recall June 21, 1948, the date when the D-mark first entered circulation, as a real turning point in their personal and national histories. Goods which had been unavailable for years outside the black market suddenly reappeared in the shops overnight, and people finally had the sense that their currency was really worth something again. The abandonment of the D-mark in favour of the euro is a real leap of faith in the idea of a peaceful and united Europe in which Germany has invested so much over the past half century. |
Things were historically rather different in the countries of southern Europe where generally weak currencies symbolised prevalent political instability and economic stagnation, or failure. Italians especially are quite happy to wave goodbye to the lira--their currency since the foundation of the Kingdom of Italy in 1860--with no regrets. Yet here too issues of national identity come into tension with apparent economic advantage. While Greeks are pleased to have made it into the Eurozone (polls suggest about 70 percent support in favour), they are not without a few reservations. Traditionally they have have made much of the fact that their currency, the drachma, is the oldest in the world. Drachma was indeed one of the earliest and most widely used denominational names in ancient Greek. But it had passed out of general use for the best part of 1500 years until its antiquarian revival in 1833 as the name for the new currency of the Greek Kingdom, founded in that year. Nevertheless, the drachma, though scarcely an unalloyed success as a currency, is still a central symbol of the Greeks' national story, whether taken back to antiquity or only as far as the nineteenth century, and some are understandably hesitant about giving it up. They are also rather resentful that some of their Aegean islands have been left off the maps of Europe on the new currency! |
Constitutional change led to Portugal adopting a new currency in the escudo upon the overthrow of the monarchy and the foundation of the new republic. The situation in Austria was similar. The eventual collapse of the Austro-Hungarian Empire after the First World War, and the subsequent hyper-inflation of the early 1920s undermined the old imperial krone and led to the introduction of the schilling in 1924 by the new, and somewhat diminished, Austrian Republic. The parallel retreat of British imperial power within Ireland brought on the establishment of the Irish Free State in 1921, and the first issue of Irish currency in 1928, though the Irish pound remained tied to sterling until as late as 1979. |
It is something of an irony that the origins of two of the three European currencies not joining in the euro, the Danish krone and the Swedish krona, lie in a previous monetary union of 1873, when these two countries aligned their currencies and coinages (they were joined by Norway in 1875, also adopting the krone as its principal monetary unit). The Scandinavian Monetary Union petered out in the 1910s but the currencies have retained their common name and look set to maintain their independence for a while to come. |
Here then is the prime difference between the now obsolete currencies of Europe and the British pound. The currencies of our continental neighbours have had brief lives; we can see where their origins lie. And if we can comprehend the beginning of something it is all the easier to imagine and reconcile oneself to its end. The very elusiveness of the history of the pound and of its origins contribute to make it such a powerful symbol to so many today. |
Visit the exhibition Brief Lives: Changing Currencies in Western Europe, which looks at the history of Europe's national currencies, between 21 February to 8 September 2002, in Gallery 69a. |
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