The current monetary system has been blamed for the frequent episodes of turmoil that shock the world in the form of financial crises. Many economists argue in support of a new global financial order whereby only one currency will be in use. This, they argue, would remove the control of currencies from the hands of a few people.
The current financial order where each country controls its own currency was started by the elite and the influential. Many economists are today concerned that the issue of instituting a single world currency should be considered as an emergency. The quest for an economically harmonized world traces its roots to the drafting and signing by various countries of the Bretton-Woods Agreement as early as 1944.
The Bretton-Woods Agreement was spurred by the economic depression that was witnessed in the 1930s and during the Second World War. The current global economic crisis presents the world with another chance of imposing sterner regulations on national sovereign economies. The Bretton-Woods institutions that exist today such as the World Bank and the International Monetary Fund might be of very good help.
It was in the peak of the current financial crisis that British Prime Minister Gordon Brown urged the world to think seriously about a “new global financial order”. Within this approach, he said, all economies would be regulated through a unified system that would make use of unified policies.
However, according to many economists, the formation of a global financial body is too radical. They empathize with the concerns of the likes of Gordon Brown but they wonder if that is a realistic move. Change is always taking place and that could be the direction that world leaders will have to reluctantly follow. But in the present circumstances, a more urgent measure is needed in order to solve the problems at hand.
A global monetary authority that would not infringe into the sovereign jurisdiction of individual nations would be a more welcome move. This is the line of action that those who are afraid of a global financial dictatorial administration readily support. Within such a framework, there would be need for national leaders to honor their pledges.
[ad#downcont]It has been proven that when national leaders are expected to act in goodwill in order to pass and abide by treaties of international significance, some national political forces come in the way and hold them back. This is not to say that internationalization is not a possibility. After all it has been tried and tested in areas of trade and technology.
International financial reforms are being viewed with urgency only because there is a financial crisis. If there were no crises to fear, the issue of a global currency would not arise in the first place. The idea of a global currency might not succeed since weaker states know that their sovereignty lies in their ability to control their own currencies as a means to their own ends.