We are in 1931. Germany, like Greece of today, was on the verge of bankruptcy. Need the support of major countries. But France, which had huge foreign exchange reserves, poses unacceptable political conditions in Berlin. Britain hesitated to commit their most meager reserves, which are considered essential to the defense of the pound. The other European countries were too small to move without the two main financial powers. In the U.S., preoccupied with own crisis of 1929 (just like today for the crisis of 2008), the public had not seen favorably commitments in Europe. He lost precious weeks. In the end, no support, Germany drastically limited the export of capital and suspended the repayment of all foreign loans.
Then, as now, the international collective action responded first to the logic of domestic politics in each country, but the delay proved fatal. The delicate social and political system of Weimar was mortally wounded. The pound, attacked by speculation in a classic case of contagion, was dropped from the gold and devalued. The system of fixed exchange rates collapsed. U.S. banks lost the substantial capital invested in Germany. France had to renounce the repairs. And Hitler came to power.
The story is never likely to be repeated because some European monetary union is solidly built, not comparable to the fragile gold standard of the 30s, but ... ...
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