Designing the rules and principles of the International Clearing Union: Past and present debated issues

In this chapter, I discuss four major problems. The first one is the policy space of the member countries. I question the assumption according to which the ICU will necessarily increase the monetary and political sovereignty of the member countries and relieve them from outside external pressure. I argue that external pressure does not disappear – it cannot – but is redirected towards creditor countries in a more equitable way. The second problem is related to the exchange rate regime adopted by the ICU and more generally the long-term credibility of the whole institution. I assume that only a quite rigid fixed exchange rate regime would make sense for the ICU, with regard to its infrastructure and credibility. The third section is related to the question of cross-border financial flows, recorded by the balance of payment as short-term (portfolio investments) and long-term (foreign direct investments) investment flows. Some versions of the plan for an ICU ignore or reject the possibility of cross-border financial flows and assume a framework of financial deglobalization, while others include a financial infrastructure that allows potentially large financial flows – which admits the possibility of large disequilibrium within the system. The fourth question is related to the role of the State and economic planning. The establishment of the ICU involves the adoption of restrictions on businesses and individuals regarding currency matters, which can raise some objections in the business elite. To some extent, the State has to play a greater role in the economy with the ICU. This last section discusses the degree of State intervention and planning induced by the creation of the ICU.