Otsensted Monetary Union
The Otsensted Monetary Union is an agreement betweeen Canaria, Coelans, Emerstari, New Retermi, Saurland, and Soumeland that was devised in 1857 and put into effect on by the Treaty of Otsensted 17 December 1862. The treaty sets each country's currency to the same bimetallic standard, with a present gold to silver ratio of 1:56, and requires that all contracting states print and strike freely exchangeable banknotes and coins according to common specifications. For example, one Canarian thaaler, Coelansish kron, Emerstarian skille, Saurish krona, and Soumish sjaåla are all equal to 0.1 g of gold or 0.56 g of silver. The present values of gold and silver were most recently set in 1986 as a result of regionally unstable prices leading to economic downturn across the union in 1979: one troy ounce of gold is set as 940.57 NSD and one troy ounce of silver is set as 16.80 NSD.
Among other things, the OMU was originally created to facilitate trade between all of Scania, setting the standards by which gold and silver may be minted and exchanged. This plan, however, never came to fruition due to the rejection of the bimetallic standard by Marseile and Polsnia at the time, and as a result of this, the OMU has only received two new signatories since its creation, both of which were formerly possessions of Emerstari that peacefully seceded. Still, the currency of any member state may be used within another member-state.
The regulation of the OMU is overseen by the Ostensted Treaty Council, which is based in the city of Ostensted in Coelans and is composed of the heads of each member state's central bank as well as their heads of states and/or heads of treasury. Currently, the board has twenty-three members. Its primary tasks are to monitor and act accordingly to international gold and silver prices, debasement, inflation, and deflation.
Background
Still in the 1850s, many economies in Scania were suffering from lingering effects of the Wars of the Coalitions which had been fought on and off from 1792 until 1831 and taken the lives of an estimated ten million people, the second largest total death toll of any conflict to have ever been fought in Arda en' Estel; it is surpassed only by the Ten Years' War which took the lives of an estimated sixteen million people and also had severe effects on many economies. In central Scania, where many of the largest battles of the war had occurred, not only were there labor shortages, but there was also famine. As a result of this, the countries that emerged from the recently defunct Holy Scanian Empire sought financial aid from powers such as Emerstari, Marseile, and Polsnia. There was none to give, however; while there was not mass famine or extensive labor shortages present in these countries, each of them were deep in debt due to the war. In fact, on 21 June 1854, the Polsnian government declared bankruptcy.
As all Scanian currencies were at this point on a gold, silver, or bimetallic standard, in an effort to strengthen their national economies through the implementation of a monetary union, representatives from twelve countries met in the Canarian city of Goewe. This meeting did not result in any sort of agreement between the nations present, and negotiations broke off due to the rejection of different standards by different nations. It did, however, result in two different monetary unions, the Ostensted Monetary Union based on the bimetallic standard in 1862 and the Antoup Monetary Union based on the gold standard in 1865.
Member states
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On the creation of the Ostensted Monetary Union in 1862, there were five signatories, including Canaria, Coelans, Emerstari, the Friedish Confederation, and Saurland. Soumeland gained its independence from Emerstari in 1904 and was admitted into the Union shortly thereafter. Similarly, New Retermi gained its independence from Emerstari in 1953 and was admitted into the Union. The Friedish Confederation was dissolved and integrated into Coelans in 1922.
| State | Admitted | Population |
Nominal GDP (millions) |
GDP per capita nominal |
Currency |
|---|---|---|---|---|---|
| Canaria | 17 Dec. 1862 | 12,403,926 | - | - | Thaaler |
| Coelans | 17 Dec. 1862 | 42,608,127 | - | - | Kron |
| Emerstari | 17 Dec. 1862 | 57,406,218 | - | - | Skille |
| Friedish Confederation | 17 Dec. 1862 | - | - | - | - |
| New Retermi | 1 Jan. 1955 | 23,981,485 | - | - | Skille |
| Saurland | 17 Dec. 1862 | 21,093,867 | - | - | Krona |
| Soumeland | 20 May 1905 | 19,728,034 | - | - | Sjaåla |
Economy
See:
• Economy of Canaria
• Economy of Coelans
• Economy of Emerstari
• Economy of New Retermi
• Economy of Saurland
• Economy of Soumeland
National debt
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For mutual assurance between member states and stability of the currencies within the union, a clause was added to the Treaty of Ostensted in 1996, setting limits on deficits and national debt. There are, however, no in-place penalties or sanctions for deviation from these restrictions.
| State | National debt (millions) | National debt (% of GDP) |
|---|---|---|
| Canaria | - | 0 / 100
|
| Coelans | - | 0 / 100
|
| Emerstari | - | 0 / 100
|
| New Retermi | - | 0 / 100
|
| Saurland | - | 0 / 100
|
| Soumeland | - | 0 / 100
|
Currencies
The Treaty of Ostensted requires that all contracting states print and strike freely exchangeable banknotes and coins according to common specifications, but it does not require that all contracting states adopt the same currency. Though, there was consideration of that at some point in the latter half of the the twentieth century. Thus, there are five distinct currencies present in the union: the Canarian thaaler, the Coelansish kron, the Emerstarian skille, the Saurish krona, and the Soumish sjaåla, which has its origins in the Emerstarian skille.
Exchange rates
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Though there are several currencies within the Union, as they are all made with backed by common specification, the exchange rate between these currencies and foreign ones is the same.
Criticism
Since its creation, there has been both internal and external criticism of the Ostensted Monetary Union, ultimately originating with the rejection of the bimetallic standard by several nations represented at the Goewe Meeting. In the nineteenth century, it was claimed by many economists, notably Jean-Louis Bernard, within the Antoup Monetary Union and elsewhere that the bimetallic standard was unstable and was merely a backwards form of the gold standard. With the abolition of metal standards in several Scanian nations in the twentieth century, criticism of the idea of having any metal standard at all began both internally and externally. In fact, there were bills in the Coelanish and Emerstarian legislatures to withdraw from the treaty entirely in 1982 and 2003 respectively. Neither would receive more than one-third of their respective votes.