In the past, if a government opted for a ‘hard money’ strategy by adhering to the gold standard or declining to lower interest rates, it had to answer to its local electorate. But in the circumstances of the later 1970s, a government in London—or Stockholm, or Rome—facing intractable unemployment, or failing industries, or inflationary wage demands, could point helplessly at the terms of an IMF loan, or the rigours of pre-negotiated intra-European exchange rates, and disclaim liability.
