abstract
| - The Scandinavian countries where greatly affected by the lack of credit and loans. After the crisis it was difficult to boast their national economies. Public spending and investment was becoming the only viable policy implemented by most social democratic and agrarian governments in Scandinavia and Estonia. The funding of unemployment benefits, new state welfare services, agricultural subsidies and rural poverty relief produced a rare consensus in all governments. The new consensus was the need to control credit, secure loans and an expansionary monetary policy to create demand and fund public spending. In November of 1931 the governments of Denmark, Norway, Sweden, Iceland, Finland and Estonia agree to recreate a new Scandinavian Monetary Union. The value of all currencies would be determined by a basket of currencies, regulated and supervised by the central banks of the members states. The member states would mutually guarantee all their public loans, promote and built public works of common interest, set common banking regulations for the area and promote flow of private capital. It also created the Nordic Investment Bank for mayor investment in common public works like transports infrastructure (roads, railways, ports and airports), communications and energy (nordic electrical grid). Later the Nordic Industrial Development Fund was formed, in charge of planning, advising and subsidizing research and development of new technologies and industries. In 1932 it was agreed to introduce the Greenlandic krone as a replacement of the several distinctive Greenlandic currencies and tokens, and pegged to the Danish krone. Its success in co-operation and practical results lead to the establishment of the Nordic Association has a regional entity in 1934. In late 1930s the SMU begun a limited implementation of the Nordic Krona (NK) as a common and single unit of account and possibly a common currency for the member states of the Nordic Association in the future.
|