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What Was The Desire Behind The Bretton Woods Agreement

| 12/21/2020

At a meeting of finance ministers from the Common Market countries, which ended on 27 February in Rome, all participants agreed that imf reform, which gives them a veto, should be accepted at the same time as the creation of a new liquidity system. However, unlike the other participants, France wanted to maintain the condition that the U.S. balance of payments be in balance for some time before the process of creating new liquidity began. In that case, Michel Debré proposed, in isolation, that France should be able to participate in discussions on the creation of the liquidity system, but asked for the possibility of being withdrawn from the agreement to implement the scheme if it did not take into account the circumstances conducive to the creation of new liquidity. Thus, the Rome meeting could not be decided unanimously by all the countries of the common market. The avant-garde idea of the Bretton Woods conference was the idea of open markets. In his conclusions at the conference, the President, U.S. Treasury Secretary Henry Morgenthau, said that the creation of the IMF and IBRD marked the end of economic nationalism. This meant that countries would retain their national interests, but trading blocs and spheres of economic influence would no longer be their means. The second idea behind the Bretton Woods conference was the joint management of the Western political and economic order, which means that the major democratic industrialized countries must, in addition to their responsibility to govern the system, remove trade barriers and capital movements.

When many of the same experts who observed the 1930s became the architects of a unique new postwar system at Bretton Woods, their guiding principles became “more a beggar in your neighbour” and “the currents of control of speculative financial capital.” It was desirable to avoid a repeat of this process of competition devaluation, but in a way that would not force debtor countries to reduce their industrial base by keeping interest rates high enough to attract foreign bank deposits. John Maynard Keynes, who refrained from repeating the Great Depression, supported the British proposal to force surplus nations to import from debtor countries, either to import from debtor countries, to debtor countries or to debtor countries. [10] [11] The United States rejected Keynes` plan and a senior U.S. Treasury official, Harry Dexter White, rejected Keynes` proposals for an International Monetary Fund with sufficient resources to counter destabilizing flows of speculative financing. [12] However, unlike the modern IMF, White`s proposed fund would have automatically countered dangerous speculative currents, without political strings being made – that is, no IMF conditionality. [13] Economic historian Brad Delong writes that Keynes was then proved by events at almost every point where he was rejected by the Americans. [14] [doubtful] Following the President, Giscard d`Estaing gave a speech on 11 February at the Law School of the University of Paris.

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