Historical Sketch

In the 16th century, the Netherlands came from Burgundy to Habsburg rule, which at the time was centred in Spain. Reformation led to the partition of 1648 between the United Provinces of the Northern Netherlands and the Spanish Netherlands in the south. After the War of Spanish Succession the Southern Netherlands remained with Habsburg, now reduced to the Austrian branch. Revolutionary France annexed both the Northern and Southern Netherlands in 1795 and kept it until the end of the Napoleonic era. The 1815 Vienna Congress created the new Kingdom of the Netherlands comprising both parts, thus did not restore the Austrian rule. The confessional difference between the former United and Spanish-Austrian Netherlands re-emerged in the new state and led to the so-called Belgian Revolution of 1830 and the creation of the Kingdom of Belgium in the following year.

Monetary History Overview

The traditional accounting unit in the Spanish-Austrian Netherlands was the Brabant Guilder, derived from a 18th century silver coin. Independent Belgium decided to adopt French accounting, rather than Dutch although the currency of the United Netherlands had been introduced in 1816. In June 1832, a coinage law was passed that created the Belgian Franc in the bimetallic French standard. In 1851, the National Bank began operations and issued paper money. Four commercial banks had already circulated their private notes before. Belgium was one of the founding members of the Latin Monetary Union of 1865, such that afterwards, French gold and silver coins were dominating the circulation. During the First World War, Germany occupied Belgium. The National Bank was suspended, and paper money issuance was mandated to a commercial bank. The Belgian Franc got pegged to the German Reichsmark. With the German defeat in 1918, the Belgian pre-war institutions got restored, including central bank and currency. In the subsequent economic crisis, the Franc depreciated strongly. until in 1926, the economical stabilization was successful so that the currency could be pegged to gold again. Unlike other European countries, Belgium maintained the gold standard until the outbreak of World War II. The 1926 currency law also introduced the Belga of 5 Belgian Francs as an auxiliary currency unit, banknotes and coins carried two denominations, accordingly. The intention to fully switch to the Belga was not carried through as the Belga was not popular among the population such that it disappeared again after the war. During World War II, Germany occupied Belgium once again. The National Bank continued operations, but the central bank role was mandated to an occupation institute. After the liberation in 1944, the Belgian pre-war institutions got restored, including central bank and currency. The wartime cash surplus was partly confiscated during the subsequent exchange of banknotes. In the Anglo-Belgian Monetary Agreement of October 1944, the Franc got pegged to the Pound Sterling to avoid a depreciation during the post-war economic restoration. Belgium only partially followed the Sterling devaluation of 1949 and re-pegged to the US Dollar afterwards. The fixed rate continuied without change until the floating of the Dollar in August 1971. Belgium then decoupled its currency and joined the European currency system. Belgium is a founding member of the European Monetary Union and has introduced the European Euro in 1999. The Belgian banknotes and coins were withdrawn in 2002.

Belgium joined the International Monetary Fund (IMF) on 27.12.1945 as a founding member.

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