For some countries, including France, distribution constitutes the central problem, while for others the emphasis lies on the insufficiency of liquidity and the search for new mechanisms of creation. Measuring international liquidity needs is not straightforward, especially because it requires distinguishing clearly between “owned” reserves and “conditional” reserves associated with credit facilities from the International Monetary Fund or with swap and deposit agreements between monetary authorities. A swap agreement is an exchange of currencies between central banks that must be reversed at a specified date. However, under gross accounting principles, each use of funds through a swap results in an increase in total global reserves equal to twice the volume of funds used. If recorded on a net basis, global reserves would remain unchanged, but this is not the usual practice. This accounting approach can distort the assessment of monetary reserve levels.
Countries that seek, unlike the IMF procedure, to clearly distinguish real international reserves from credit facilities do not conclude that liquidity is overvalued. On the contrary, they often argue that the insufficiency of international means of payment is even greater. The notion of adequate reserves is difficult to define, as it depends both on each country’s reserve preferences and on the evolution of global trade. It is notable that countries with large gold and foreign exchange reserves, such as France and Germany, consider liquidity sufficient, while others, such as the United Kingdom, focus on increasing rather than replacing existing sources. It is not possible to assert that the reserves of developing countries are excessive or even sufficient. The distribution of liquidity is therefore as important as its creation. In any case, the provision of international purchasing power to poorer countries depends largely on direct aid from wealthier nations and on reforms to the international monetary system. During an annual meeting of the International Monetary Fund, Valéry Giscard d’Estaing stated that monetary reform and the development of poorer countries are “technically distinct but politically and psychologically linked.”
External aid also represents a capital outflow for donor countries, contributing in part to deficits such as that of the United States. The French proposal suggested that the distribution of newly created reserve assets should be at least partially proportional to the volume of aid provided by each of the major industrialized countries. Such a mechanism favors those countries contributing the most to international assistance. In this context, France and the United States occupy prominent positions. This raises a broader question: whether each country continues to propose solutions for aid to poorer nations that cost them the least or yield the greatest benefit.
Plans to reform the international monetary system are primarily designed by developed countries. Monetary discipline, understood as deflationary policies aimed at eliminating deficits, offers limited relevance for developing nations, which can only sustain deficits when they are financed through external assistance. Regardless of the mechanisms adopted, the monetary system alone cannot ensure development. Nevertheless, some approaches link monetary reform to the restructuring of aid provided by industrialized nations.
The “Collective Reserve Units” proposed by France are fiduciary instruments that do not bear interest and would be created by a group of industrialized countries outside the IMF framework. They would be held alongside gold in reserves according to a fixed and uniform proportion. Their creation could occur either through gold deposits with a central institution such as the Bank for International Settlements or through deposits of national currencies backed by gold guarantees. To maintain the balance between gold and these units, member countries would periodically exchange gold for reserve units and vice versa. Countries losing gold would recover part of it by transferring an equivalent volume of reserve units, while those gaining gold would transfer part of their holdings in exchange for such units. By allowing reserve creation through national currencies, key currencies would effectively disappear, or alternatively, all currencies would become reserve currencies. This would eliminate the dominance of the US dollar and the British pound, limiting the ability of any single country to finance external deficits through its own currency. The French plan, rigorous in its demand for monetary balance, also aims to reduce the international role of key currencies. Short-term international credit would no longer be concentrated in a few countries but distributed among a group of industrialized economies.