Bretton Woods Agreement Effect

The United States launched the European Economic Recovery Plan (Marshall Plan) to provide significant financial and economic assistance for the reconstruction of Europe, mainly through grants, not loans. Countries that are part of the Soviet bloc, for example. B Poland, were invited to receive the subsidies, but obtained a favourable agreement with the COMECON of the Soviet Union. [31] In a speech at Harvard University on June 5, 1947, U.S. Secretary of State George Marshall stated that the World Bank was not (and is) not the central bank of the world, despite its name. At the time of the Bretton Woods Agreement, the World Bank was created to lend to European countries devastated by the Second World War. The World Bank`s objective has been altered by the fact that funds have been lent for economic development projects in emerging countries. Their main function disappeared when the Bretton Woods agreement ended and both institutions have been seeking a goal since 1971 (with very limited success). A devastated Britain had little choice. Two world wars had destroyed the country`s main industries, which paid to import half of the country`s food and almost all its raw materials except coal. The British had no choice but to ask for help. It was not until the United States signed an agreement on December 6, 1945, to provide $4.4 billion in aid to Britain that the British Parliament ratified the Bretton Woods Agreements (which was done later in December 1945). [24] Financial crises during THE TERM OF US President Richard Nixon led to the end of the Bretton Woods system.

During these years, the amount of dollars held abroad exceeded the value of gold reserves held by the United States, at Fort Knox and elsewhere. This undermined the premise of the deal, which is that the U.S. could still back up its dollars with their gold counter-value. The shift towards a more pluralistic distribution of economic power has led to growing discontent with the privileged role of the US dollar as an international currency. As, in fact, the central bankers of the world, the United States, have determined by their deficit the level of international liquidity. In an increasingly interdependent world, U.S. policy has strongly influenced economic conditions in Europe and Japan. As long as other countries were willing to hold dollars, the United States could spend heavily abroad for political purposes — military activities and foreign aid — without the risk of balance of payments restrictions. Comprehensive cooperation between governments will be needed to accelerate the recovery and ensure that excessive competition does not conflict. Could a new Bretton Woods agreement contribute to global economic and financial recovery, not only by recognizing its finished operation, but also by establishing criteria that will lead to an orderly dissolution once its work is completed? The suspension of dollar-gold convertibility was really the most significant change since it effectively ended the gold exchange standard and marked the death of the Bretton Woods system. . .