Financial Talks at U.K. Treasury

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Instigated by John Maynard Keynes, the famous British economist, a series of conversations between the exiled European Finance Ministers and their experts in London took place between July 1942 and February 1943. The aim of these conversations was for the British government to see how the exiled Europeans conceived of their post-war economic problems – for example in relation to their currency.

One particular problem that surfaced was the fact that the exiled governments expected an enormous balance-of-payments deficit with the dollar-zone for the European continent as a whole. They had to import most of their goods needed for their reconstruction efforts from abroad – and most likely from the United States.

What also became apparent at the meetings was the fact that Europe’s exile governments, most notably Belgium, France and The Netherlands, all proposed regional forms of monetary clearing mechanisms that could easy payments problems and facilitate post-war trade between them. However, the negotiations for a post-war international system of free trade and currency convertibility was mainly an Anglo-American affair in which the exiles had little influence.

Nevertheless, Keynes brought together some of the proponents (and ideas) of the regional currency clearing mechanisms that were advanced after the war in the OEEC, when European governments were thinking about creating the intra-European payments mechanisms. Eventually, this would lead to the creation of the European Payments Union (EPU).