Bretton Woods Articles Of Agreement

The Bretton Woods Agreement of 1944 established a new global monetary system. It replaced the gold standard with the US dollar as the world currency. In this way, it established America as a dominant power in the global economy. After the agreement was signed, America was the only country capable of printing dollars. When a member leaves the Fund, the normal operations and transactions of the Fund shall be suspended in its currency, and payment of all accounts between it and the Fund shall be made with appropriate dispatch by an agreement between it and the Fund. In the absence of an agreement without delay, the provisions of Annex J shall apply to the statement. Powerful nations largely agreed that the lack of exchange rate coordination in the interwar period had exacerbated political tensions. This facilitated the decisions of the Bretton Woods conference. Moreover, all the Bretton Woods participating Governments agreed that the monetary chaos of the interwar period had brought several valuable lessons. 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 said: 4. If the fund`s holdings on the currency of an outgoing member exceed the amount due to it and no agreement is reached on the method of settlement within six months of the date of exit, the former member shall be obliged to exchange that excess currency into a freely usable currency. Repayment shall be made at the rates at which the Fund would sell those currencies at the time of payment of the Fund. The outgoing member shall complete the repayment within five years of the date of exit or within a longer period fixed by the Fund, but shall not be required to repay, in the course of half a year, more than one tenth of the excess assets of the Fund in its currency at the time of exit, as well as other acquisitions of the currency during the same period. If the outgoing member does not comply with this obligation, the Fund may liquidate, in an orderly manner, on any market, the amount of the currency that should have been repaid. .

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