Father of France

Chapter 235 The Devaluation of the Franc

In Koeman's memory, France used a lot of money to import coal, oil and equipment from the United States to address its urgent energy shortage.

It also imports grain, fertilizer, and tractors to address food shortages and improve agricultural productivity.

Food and energy alone accounted for 50 percent of the Marshall Plan's funding; otherwise, some people would say that the United States recouped half of the Marshall Plan's funds in a short period of time.

While energy and food are still major expenditures for the Schuman government, it's already much better than spending 50 percent of its funds on energy and food.

These contributions were made by the people of French Indochina, Thailand, and parts of Java, and of course, by the Soviet Union.

With the foundation of optimized funding, the Schuman government finally managed to squeeze out investment in the Mediterranean railway connection project, which was no easy feat.

Although the United States experienced some confusion in the first year or two after the war, the fact that it was able to pass the Marshall Plan showed that the United States had begun to explore how to become a supreme ruler of Europe.

The United States will not be completely unconvinced if France uses Marshall Plan funds outside its own territory.

The United States is demanding that European countries establish the Organization for European Economic Cooperation (OECD) in an effort to break down trade barriers and promote European economic integration. This reflects the US's "carrot and stick" strategy, where aid is contingent on Europe moving towards unity.

The United States, with relatively little funding, has leveraged a large amount of financial resources from European countries and guided them towards areas that the United States desires.

Who knows if France's overseas provinces are the areas the US desires? But now, before the Marshall Plan, military control of the North African overseas provinces has been completed, which should be much better than our counterparts in another world.

Koeman was unaware that the People's Republican Movement government had fought with the United States over this matter. The funds from the Marshall Plan were indeed urgently needed by France, but whether to accept them would be a real question if it jeopardized French control over its colonies.

When George Pidur negotiated with the United States, he expressed a completely different attitude from that of the United Kingdom, and even incorporated this attitude into the transatlantic partnership proposed by the British.

British diplomatic missions have begun discussions with France to replace the Brussels Treaty Organization with another military alliance that would include the United States and Canada in North America.

In fact, this is NATO's replacement for the Brussels Treaty Organization. The British hoped to work with France to prevent the United States from pushing for the formation of NATO on its own.

As for the leadership of NATO, currently only the United States has the strength to be the leader, while the United Kingdom, as NATO's deputy, forms a military alliance with the United States as the main leader and the United Kingdom as the assistant. The positions of Deputy Commander and Secretary General of NATO are positions that the United Kingdom is determined to obtain.

But this is not good for France. France has no intention of competing with Britain for leadership. Georges Pitoull has his own insistence on the scope of NATO's common defense, namely that France's overseas departments, namely Algeria, must be within the scope of the common defense. If this is not agreed to, France will not participate in the drama that Britain has prepared to refuse three times.

The collective defense clause must clearly state that overseas departments are equivalent to the French mainland, not colonies. If this is not stated in the military alliance, then there is no need for France to join.

In fact, the clauses that Georges Pitoure insisted on including in the document were one of the reasons why France later withdrew from NATO.

After Algeria's independence, France no longer trusted NATO's collective defense clause. Since Algeria, which was considered part of France's territory, had become independent, how could France still believe in the effectiveness of the collective defense clause?
The United States clearly agreed to this, yet when Algeria gained independence, it treated the leaders of the local independence movement as honored guests. Isn't this a betrayal of France?

This made it difficult for the United States to sit up straight and accept the British's three refusals and three concessions.

France's stubbornness greatly displeased the United States, which was waiting for the two old-fashioned kings, Britain and France, to help it ascend to the throne. Therefore, the United States could only turn a blind eye to the Schuman government's use of some funds for railway construction in Algeria's overseas provinces.

It is clear that France will continue to fight the United States over the Algerian issue, as both the southern and northern shores of the Mediterranean are an integral part of France.

The United States did not simply make concessions to France. For example, with the devaluation of the franc imminent, the Schuman government had agreed to allow the franc to be exchanged at its real value, which was also a condition of the Marshall Plan.

When news reached Saigon that France had announced a devaluation of the franc, with the exchange rate set at 214 francs to one dollar… it actually had no significant impact.

France currently employs a complex multi-currency system, using different exchange rates for different types of transactions, somewhat similar to the relationship between the CFA franc and the French franc. Therefore, much like the explanation given by ministers regarding the depreciation of the pound sterling, for most French people, the currency depreciation is merely a numerical change, at least in the short term.

Fortunately, Koeman himself knew that the franc was unreliable, so apart from rewarding his troops, he also hoarded US dollars when he was doing business. Otherwise, he would have lost a fortune just from this exchange rate change.

For most French people, exchange rate changes are interpreted much like the real value hasn't changed, but for those involved in import and export, it's a completely different story.

"The franc has depreciated by almost 100%, and the pound by 40%. This is actually the real gap between France and Britain now."

Koeman recalled that Britain only managed to hold out for another year before it couldn't hold on any longer and devalued the pound, changing it from one to four against the dollar to one to two and a half.

The devaluation of the pound sterling had a far greater impact than that of the franc, which was the international reserve currency before the war.

The French franc was used in some French-speaking colonies, which were not particularly powerful nations.

The situation was quite different in Britain's colonies. The devaluation of the pound was met with collective opposition from Australia, New Zealand, and Canada. Britain spent considerable diplomatic resources to gain their understanding, making these English-speaking countries suffer the loss of their reserve currencies due to the hardships faced by their former colonial power.

French colonies, on the other hand, were less sensitive to the devaluation of the franc because their versions were too outdated and inferior.

This is normal. The fact that French-speaking African countries have been able to accept decades of exploitation by the African franc proves that the level of French-speaking countries is indeed not very high, and France can achieve its goals with some underhanded tactics.

The news of the franc's devaluation should not cause trouble for the French troops in French Indochina. Corman called Lefèvre over and explained the logic behind it: "To let our comrades know that the franc has not been devalued, we must first understand that the franc is the actual settlement currency in French. France is an internally-circulating country, and the devaluation of the franc has nothing to do with the vast majority of people in this country. The money in their pockets has not decreased."

"Sir, although our main job as a military police force is to maintain stability, you're not lying to me about this devaluation of the franc, are you?"

Upon hearing of such a momentous matter, Lefebvre, for the first time, abandoned his blind trust in Coman. This was a serious matter, a very serious matter, and they were facing the French army, their own comrades.

“Only a small portion of a country’s total currency is related to imports and exports.” Coman cleared his throat, feeling he should explain the domestic economic cycle. “France’s economy is driven by a model that relies mainly on domestic production, distribution, circulation, and consumption to drive economic growth. Non-essential sectors cannot depend on the United States. Trade with the United States ranks after that with its colonies and European countries, with trade with its colonies accounting for more than 40 percent. It is much safer than Britain.”

The domestic economic cycle is also a policy that major Eastern countries are focusing on promoting in the 21st century. Its purpose is similar to that of France: to prevent the raw materials and energy it needs from being affected by the US dollar.

The so-called internationalization of the RMB, putting aside the long-term goals, the short-term goals are easy to see: to prevent the US dollar from pricing the raw materials and energy imported by the major Eastern power, and to force BHP Billiton to settle in RMB for the same purpose. As long as it is not affected by the US dollar, the internationalization of the RMB can be considered a success.

Why do I say this? It's because the global trade in goods is indeed a negligible proportion compared to the stock of US dollars. More than 90% of US dollars have nothing to do with global trade in goods; they are held by financial institutions such as investment funds, and have little to do with the real economy.

The short-term goal of this major Eastern power is that the United States can use the dollar to exploit whomever it wants, and I will not stop it from exploiting whomever it wants, but it cannot exploit me.

As long as imports and exports related to goods trade can be settled in RMB, the great Eastern power will not be exploited by the US dollar on a large scale, if not entirely.

Otherwise, most of the US dollars would be held domestically in the United States. If Americans used their dollars to buy things in another country, wouldn't they end up buying up all of that country's industries?
"I see." Lefevere understood a little better and said admiringly, "Sir, you know so much about this field. I wonder where you learned it."

"One is never too old to learn." With a turn of his head, Coman gave Lefevere a view of his back to the crowd.

Lefève immediately explained the concerns of French officers and soldiers about their wages caused by the recent devaluation of the franc, and brought up the newly learned concept of the domestic economic cycle to stabilize the morale of the French army.

The newly appointed chief executive officer of the embankment military court is getting more and more into work mode, and the crawling retreat tactic has a successor.

“The entire Saigon legal system is under my control. You see who will back you up.” Coman kissed Taylor’s little mouth repeatedly, determined to make this generation’s British treasure realize the power of the underworld.

(End of this chapter)