1919: the year another European currency union died

Almost a century ago, the break-up of the Austro-Hungarian Empire and the demise of its single currency left devastation and panic in its wake, says Seán Keyes. Is history about to repeat itself in the eurozone?

Austria-Hungary was a sprawling central European power. It comprised parts of the modern-day Czech Republic, Slovakia, Poland, Ukraine, Romania, Hungary, Serbia, Montenegro, Bosnia and Herzegovina, Croatia, Slovenia, Italy and Austria. Its currency, the krone, was formed in 1892 and managed by the central bank in Vienna and Budapest.

After World War I, the empire was broken into four parts by the Allies, who blamed Austria-Hungary for starting the war. By 1919, it had split into Czechoslovakia, Austria, Hungary and Yugoslavia. The empire had financed its war effort almost entirely by financing from the central bank (ie, money printing). It continued to fund itself in this way after the war.

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Sean Keys graduated from Trinity College, Dublin with a BA in economics and political science and, in 2009, from University College Dublin with an MA in economics. His MA thesis was on the likely effects of deficient eurozone governance structures.