Greece Was Ejected From The Latin Monetary Union16 September, 2011, 2:59. Posted by Zarathustra
Tags: Greece, Latin Monetary Union
European Monetary Union is not the first monetary union in history. There was something similar in history.
By a convention dated 23 December 1865, France, Belgium, Italy, and Switzerland formed the Latin Monetary Union and agreed to change their national currencies to a standard of 4.5 grams of silver or 0.290322 gram of gold (a ratio of 15.5 to 1) and make them freely interchangeable. The agreement came into force on 1 August 1866. The four nations were joined by Spain and Greece in 1868, and Romania, Bulgaria, Venezuela, Serbia, San Marino in 1889. In 1904, the Danish West Indies were also placed on this standard but did not join the Union itself. When Albania emerged from the Ottoman Empire as an independent nation in 1912, coins of the Latin Monetary Union from France, Italy, Greece, and Austria-Hungary began to circulate in place of the Ottoman lira. Albania did not however mint its own coins, or issue its own paper money until it adopted an independent monetary system in 1925.
The monetary union did not last forever, of course. It ended formally in 1927, but here’s an interesting line, also from that Wikipedia entry:
Greece was ejected from the union in 1908, for decreasing the amount of gold in their coins.
So, well, there was a precedent for Greece. Of course, the arrangement at that time was much easier for any country to join and/or quit the union. After all, they still minted their own coins.