North Kosovo known as the Ibar Kolašin, is a region in the northern part of Kosovo, composed of four municipalities with ethnic Kosovo Serbs majority: North Mitrovica, Leposavić, Zvečan and Zubin Potok. Prior to the 2013 Brussels Agreement, the region functioned independently from the institutions in Kosovo, as they refused to acknowledge and recognize the independence of Kosovo, declared in 2008; the Government of Kosovo opposed any kind of parallel government for Serbs in this region. However, the parallel structures were all abolished by the Brussels Agreement, signed between the governments of Kosovo and Serbia. Both governments agreed upon creating a Community of Serb Municipalities; the association was expected to be formed in 2016. According to the agreement, its assembly will have no legislative authority and the judicial authorities will be integrated and operate within the Kosovo legal framework. Political wrangling over Kosovo's status between its government and Serbia and has resulted in Kosovan authorities not allowing the formation of the Community.
Following Kosovo's declaration of independence in 2008, Serbs put together the Assembly of the Community of Municipalities, elected on 11 May and called by the Government of Serbia. The assembly was composed by 45 representatives; the North Kosovo Serbs had taken a hard line, refusing to cooperate with the government in Pristina or to take up their seats in the Assembly of Kosovo. Their stance was encouraged by the Serbian government of Vojislav Koštunica and they remained in control of this area with their own structures. Srpska Lista leader Oliver Ivanović and other Kosovo Serb leaders had expressed increasing frustration at Belgrade's approach and have voiced their support for a more moderate stance, speaking of rejoining the Assembly of Kosovo and taking part in its government; this line has proved controversial, as many Kosovo Serbs reject any compromise. The Serbian government, the Serbian List, the Government of Kosovo and the United Nations all oppose the separation of North Kosovo. However, many Serbs in the region were adamantly opposed to living under the rule of an Albanian-majority provincial government and rejected an independent Kosovo.
Ivanović has spoken out against partition, pointing out that more than 60,000 of the Serb population of Kosovo lives south of the Ibar, that all of the important cultural and economic assets of the Kosovo Serbs are in the south of Kosovo. In 2011, former President of Kosovo Behgjet Pacolli crossed into the Northern part of Mitrovica, it marked the first time. Such a symbolic gesture was accompanied by a heavy security presence. In early 2013, the Prime Minister of Serbia Ivica Dačić encouraged all Serbs to participate in Kosovo elections; the vast majority of Serbs turned out in large numbers to participate in elections held by the Kosovo government with symbols of the Republic of Kosovo Central Elections Commission on the ballot. With the signatory of the Brussels Agreement, Serbia dropped its support for the assembly and the parallel structures in Northern Kosovo. Both governments, of Kosovo and Serbia agreed upon creating the Community of Serb Municipalities. According to the agreement, its assembly will have no legislative authority and the judicial authorities will be integrated and operate within the Kosovo legal framework.
There will be one police force in Kosovo called the Kosovo Police. All police in northern Kosovo shall be integrated into the Kosovo Police framework. Salaries will be paid by the KP; the Appellate Court in Pristina will establish a panel composed of a majority of Kosovo Serbs judges to deal with all Kosovo Serb majority municipalities. As the final stage of dialogue between Serbia and Kosovo is approaching, various officials from Serbia stated that the partition of Kosovo, with Serbia getting North is the best solution. President of Serbia Aleksandar Vučić said on 9th August. Same could be heard from Minister of Foreign Affairs Ivica Dačić and Defense Minister Aleksandar Vulin; some Albanian politicians stated that the exchange of territories may be the solution of Serbia-Kosovo dispute, although many rejected this proposal. North Kosovo consists of Leposavić, Zvečan, Zubin Potok and North Mitrovica, it covers 9.97 % of Kosovo's land area. Owing to its border with Serbia proper, North Kosovo is not speaking, a "Serb enclave" or "Serb exclave".
Before the Kosovo War, the area was predominantly inhabited by Serbs, with a substantial Kosovo Albanians minority and smaller populations of Bosniaks and Roma. The 1991 census recorded 50,500 people in the municipalities of Leposavić, Zvečan and Zubin Potok, of whom the vast majority were Serbs, with a small number of Albanians, other smaller minorities, though the Statistical Office of Kosovo regards the accuracy of this census as "questionable" given that most Albanians boycotted it; the population of the Mitrovica municipality was predominantly Albanian, with the town itself and two of the nearby villages being ethnically mixed. Mitrovica was split between Serbs and Albanians at the end of the war, with the Ibar River marking the dividing line. North Mitrovica, now home to 22,500 Serbs and 7
Kosovo the Republic of Kosovo, is a recognized state and disputed territory in Southeastern Europe. Defined in an area of 10,908 square kilometres, Kosovo is landlocked in the center of the Balkans and bordered by the uncontested territory of Serbia to the north and east, North Macedonia to the southeast, Albania to the southwest and Montenegro to the west. Geographically, Kosovo possesses varied and opposing landscapes for its size determined by the ideal climate along with the geology and hydrology. Most of central Kosovo is dominated by the vast fields of Dukagjin and Kosovo; the Albanian Alps and Šar Mountains rise in the southwest and southeast respectively. The earliest known human settlements in what is now Kosovo were the Paleolithic Vinča and Starčevo cultures. During the Classical period, it was inhabited by the Celtic people. In 168 BC, the area was annexed by the Romans. In the Middle Ages, it was conquered by the Byzantine and Serbian Empires; the Battle of Kosovo of 1389 is considered to be one of the defining moments in Serbian medieval history.
The region was the core of the Serbian medieval state, the seat of the Serbian Orthodox Church from the 14th century, when its status was upgraded to a patriarchate. Kosovo was part of the Ottoman Empire from the 15th to the early 20th century. In the late 19th century, it became the centre of the Albanian National Awakening. Following their defeat in the Balkan Wars, the Ottomans ceded Kosovo to Montenegro. Both countries joined Yugoslavia after World War I, following a period of Yugoslav unitarianism in the Kingdom, the post-World War II Yugoslav constitution established the Autonomous Province of Kosovo and Metohija within the Yugoslav constituent republic of Serbia. Tensions between Kosovo's Albanian and Serb communities simmered through the 20th century and erupted into major violence, culminating in the Kosovo War of 1998 and 1999, which resulted in the withdrawal of the Yugoslav army and the establishment of the United Nations Interim Administration Mission in Kosovo. On 17 February 2008, Kosovo unilaterally declared its independence from Serbia.
It has since gained diplomatic recognition as a sovereign state by 113 UN member states. Serbia does not recognize Kosovo as a sovereign state, although with the Brussels Agreement of 2013, it has accepted its institutions. While Serbia recognizes administration of the territory by Kosovo's elected government, it continues to claim it as the Autonomous Province of Kosovo and Metohija. Kosovo has a lower-middle-income economy and has experienced solid economic growth over the last decade by international financial institutions, has experienced growth every year since the onset of the 2008 global financial crisis. Kosovo is a member of the International Monetary Fund, World Bank, Regional Cooperation Council, has applied for membership of Interpol and for observer status in the Organization of the Islamic Cooperation; the entire region that today corresponds to the territory is referred to in English as Kosovo and in Albanian as Kosova or Kosovë or Kosovë. In Serbia, a formal distinction is made between the western areas.
According to one theory, Kosovo is the Serbian neuter possessive adjective of kos "blackbird", an ellipsis for Kosovo Polje,'blackbird field', the name of a plain situated in the eastern half of today's Kosovo and the site of the 1389 Battle of Kosovo Field. The name of the plain was applied to the Kosovo Province created in 1864. Albanians refer to Kosovo as Dardania, the name of a Roman province formed in 165 BC, which covered the territory of modern Kosovo; the name is derived from ancient tribe of Dardani from proto-Albanian word dardha/dardā which means "pear". The former Kosovo President Ibrahim Rugova had been an enthusiastic backer of a "Dardanian" identity and the Kosovan flag and presidential seal refer to this national identity. However, the name "Kosova" remains more used among the Albanian population; the current borders of Kosovo were drawn while part of SFR Yugoslavia in 1945, when the Autonomous Region of Kosovo and Metohija was created as an administrative division of the new People's Republic of Serbia.
In 1963, it was raised from the level of an autonomous region to the level of an autonomous province as the Autonomous Province of Kosovo and Metohija. In 1968, the dual name "Kosovo and Metohija" was reduced to a simple "Kosovo" in the name of the Socialist Autonomous Province of Kosovo. In 1990, the province was renamed the Autonomous Province of Metohija; the official conventional long name of the state is Republic of Kosovo, as defined by the Constitution of Kosovo, is used to represent Kosovo internationally. Additionally, as a result of an arrangement agreed between Pristina and Belgrade in talks mediated by the European Union, Kosovo has participated in some international forums and organisations under the title "Kosovo*" with a footnote stating "This designation is without prejudice to positions on status, is in line with UNSC 1244 and the ICJ Opinion on the Kosovo declaration of independence"; this arrangement, dubbed the "asterisk agreement", was agreed
Serbia the Republic of Serbia, is a country situated at the crossroads of Central and Southeast Europe in the southern Pannonian Plain and the central Balkans. The sovereign state borders Hungary to the north, Romania to the northeast, Bulgaria to the southeast, North Macedonia to the south and Bosnia and Herzegovina to the west, Montenegro to the southwest; the country claims a border with Albania through the disputed territory of Kosovo. Serbia's population is about seven million, its capital, ranks among the oldest and largest citiеs in southeastern Europe. Inhabited since the Paleolithic Age, the territory of modern-day Serbia faced Slavic migrations to the Balkans in the 6th century, establishing several sovereign states in the early Middle Ages at times recognized as tributaries to the Byzantine and Hungarian kingdoms; the Serbian Kingdom obtained recognition by the Vatican and Constantinople in 1217, reaching its territorial apex in 1346 as the short-lived Serbian Empire. By the mid-16th century, the entirety of modern-day Serbia was annexed by the Ottomans, their rule was at times interrupted by the Habsburg Empire, which started expanding towards Central Serbia from the end of the 17th century while maintaining a foothold in the north of the country.
In the early 19th century, the Serbian Revolution established the nation-state as the region's first constitutional monarchy, which subsequently expanded its territory. Following disastrous casualties in World War I, the subsequent unification of the former Habsburg crownland of Vojvodina with Serbia, the country co-founded Yugoslavia with other South Slavic peoples, which would exist in various political formations until the Yugoslav Wars of the 1990s. During the breakup of Yugoslavia, Serbia formed a union with Montenegro, peacefully dissolved in 2006. In 2008, the parliament of the province of Kosovo unilaterally declared independence, with mixed responses from the international community. Serbia is a member of the UN, CoE, CERN, OSCE, PfP, BSEC, CEFTA, is acceding to the WTO. Since 2014 the country has been negotiating its EU accession with perspective of joining the European Union by 2025. Serbia dropped in ranking from Free to Partly Free in the 2019 Freedom House report. Since 2007, Serbia formally adheres to the policy of military neutrality.
An upper-middle income economy with a dominant service sector followed by the industrial sector and agriculture, the country ranks high on the Human Development Index, Social Progress Index as well as the Global Peace Index. The origin of the name, "Serbia" is unclear. Various authors mentioned names of Serbs and Sorbs in different variants: Surbii, Serbloi, Sorabi, Sarbi, Serboi, Surbi, etc; these authors used these names to refer to Serbs and Sorbs in areas where their historical presence was/is not disputed, but there are sources that mention same or similar names in other parts of the World. Theoretically, the root *sъrbъ has been variously connected with Russian paserb, Ukrainian pryserbytysia, Old Indic sarbh-, Latin sero, Greek siro. However, Polish linguist Stanisław Rospond derived the denomination of Srb from srbati. Sorbian scholar H. Schuster-Šewc suggested a connection with the Proto-Slavic verb for "to slurp" *sьrb-, with cognates such as сёрбать, сьорбати, сёрбаць, srbati, сърбам and серебати.
From 1945 to 1963, the official name for Serbia was the People's Republic of Serbia, which became the Socialist Republic of Serbia from 1963 to 1990. Since 1990, the official name of the country is the "Republic of Serbia". However, between the period from 1992 to 2006, the official names of the country were the Federal Republic of Yugoslavia and the State Union of Serbia and Montenegro. Archeological evidence of Paleolithic settlements on the territory of present-day Serbia are scarce. A fragment of a human jaw was believed to be up to 525,000 -- 397,000 years old. Around 6,500 years BC, during the Neolithic, the Starčevo and Vinča cultures existed in or near modern-day Belgrade and dominated much of Southeastern Europe. Two important local archeological sites from this era, Lepenski Vir and Vinča-Belo Brdo, still exist near the banks of the Danube. During the Iron Age, Thracians and Illyrians were encountered by the Ancient Greeks during their expansion into the south of modern Serbia in the 4th century BC.
The Celtic tribe of Scordisci settled throughout the area in the 3rd century BC and formed a tribal state, building several fortifications, including their capital at Singidunum and Naissos. The Romans conquered much of the territory in the 2nd century BC. In 167 BC the Roman province of Illyricum was established; as a result of this, contemporary Serbia extends or over several former Roman provinces, including Moesia, Praevalitana, Dalmatia and Macedoni
Stephen Tomašević of Bosnia
Stephen Tomašević or Stephen II was the last sovereign from the Bosnian Kotromanić dynasty, reigning as Despot of Serbia in 1459 and as King of Bosnia from 1461 until 1463. Stephen's father, King Thomas, had great ambitions for him. An attempt to expand into Croatia proper by marrying Stephen to a wealthy noblewoman failed, negotiations for a marital alliance with the Sforzas of Milan were abandoned when a more prestigious opportunity presented itself: marriage to the heiress Maria of Serbia. Celebrated in April 1459, it made Stephen the ruler of the remnants of the neighbouring country; the intent was to unite the Kingdom of Bosnia and the Serbian Despotate under Stephen to combat the expanding Ottoman Empire. Stephen's Catholicism made him unpopular in Orthodox Serbia. After ruling it for two months, he surrendered it to the encroaching Ottoman forces and fled back to his father's court, which earned him the contempt of the Hungarian king Matthias Corvinus and other Christian rulers in Europe.
Stephen succeeded his father on the throne following the latter's death in July 1463 and became the first Bosnian king to receive a crown from the Holy See. The kingdom's existence, was threatened by the Ottomans. King Stephen had the unanimous support of his noblemen in resistance to the Ottomans, but not of the common people, he maintained an active correspondence with Pope Pius II, who forgave him for the loss of Serbia and worked with him to preserve Bosnia for Christendom. The Hungarian king was placated, but all Western monarchs contacted by Stephen refused to assist him. Confident that at least Matthias would come to his aid, Stephen refused to deliver the customary tribute to the Ottoman sultan Mehmed the Conqueror, which provoked an invasion. In May 1463, Mehmed marched into Bosnia, meeting little effective resistance, captured Stephen, beheaded; the execution marks the fall of the Kingdom of Bosnia to the Ottoman Empire. Stephen was born into the House of Kotromanić as one of the two known sons of the Bosnian prince Thomas by a commoner named Vojača.
The other son died as an adolescent. Stephen's father was an adulterine son of King Ostoja and a younger brother of Radivoj, who contested the rule of their cousin King Tvrtko II. Thomas was politically inactive and did not take part in the struggle between his brother and cousin, enabling his family to lead a quiet life in a period when the Ottomans tried to weaken the Kingdom of Bosnia by encouraging internal divisions; this all changed when the ailing and childless King Tvrtko II decreed that Thomas should succeed him. The King died shortly after, in November 1443, Stephen's father ascended the throne. King Thomas, raised as a member of the Bosnian Church, converted to Roman Catholicism in c. 1445. At about that time in order to allow for a peaceful solution to his protracted war with the magnate Stjepan Vukčić Kosača, King Thomas requested from Pope Eugene IV an annulment of his union with Stephen's mother. Open warfare ended in 1446 with the marriage of Stephen's father to Kosača's daughter Catherine, by whom Stephen had a half-brother named Sigismund and a half-sister named Catherine.
In the 1450s, King Thomas vigorously searched for suitable spouses for the children from his first union. Stephen's two sisters were married off in 1451, in 1453 Stephen too entered his father's considerations. Wishing to gain control over the allodial land of Petar Talovac, who had governed Croatia proper as ban on behalf of the Hungarian king, Thomas attempted to have Stephen marry Talovac's widow, Hedwig Garai. Kosača too hastened to marry the wealthy widow, leading to an armed conflict, but neither prevailed due to an intervention by the Republic of Venice on behalf of Talovac's heirs; the earliest source mentioning Stephen by name dates from 30 April 1455, when Pope Callixtus III put the King of Bosnia and his son under his protection. King Thomas's ambitions for Stephen grew as he strived to establish closer relations with the Western world. In 1456, he asked the Pope to procure a bride for his son, specifying that she should be a princess from a royal house. Negotiations soon commenced about Stephen's marriage to an illegitimate daughter of Francesco I Sforza, Duke of Milan, but Stephen's father had greater expectations.
When Lazar Branković, Despot of Serbia, died in 1458, an interregnum ensued. Having left three daughters and no sons, he had no clear heir, so the power was shared between his blinded brother Stephen and widow Helen Palaiologina. King Thomas took advantage of their weakness to recapture Eastern Bosnian towns he had lost to Serbia in 1445. Shortly afterwards, he entered peace negotiations with Helen Palaiologina. Abandoning the prospect of his son's marriage to a daughter of the Duke of Milan, Thomas came to an agreement with Helen: Stephen was to marry the eldest of her three daughters by Lazar, the c. 11-year-old Helen. The match was prestigious for Stephen not only because of the bride's descent from the Byzantine imperial family, but because it brought the government of Serbia to the groom; the Hungarian king Matthias Corvinus agreed to Stephen's engagement with Helen – it was in his interest to create a strong buffer zone between his realm and the Ottoman Empire by uniting the Kingdom of Bosnia and the Despotate of Serbia, which he considered Hungary's vassal states, under Stephen Tomašević.
The Diet of Hungary confirmed Stephen Tomašević's right to Serbia in January 1459. Stephen, accompanied by his uncle Radivoj, duly set out for Serbia but narrowly escaped imprisonment during an Ottoman raid on the Bosnian
A mint is an industrial facility which manufactures coins that can be used in currency. The history of mints correlates with the history of coins. In the beginning, hammered coinage or cast coinage were the chief means of coin minting, with resulting production runs numbering as little as the hundreds or thousands. In modern mints, coin dies are manufactured in large numbers and planchets are made into milled coins by the billions. With the mass production of currency, the production cost is weighed. For example, it costs the United States Mint much less than 25 cents to make a quarter, the difference in production cost and face value helps fund the minting body; the earliest metallic money did not consist of coins, but of unminted metal in the form of rings and other ornaments or of weapons, which were used for thousands of years by the Egyptian and Assyrian empires. Metals were well suited to represent wealth, owing to their great commodity value per unit weight or volume, their durability and rarity.
The best metals for coinage are gold, platinum, tin, aluminum, zinc and their alloys. The first mint was established in Lydia in the 7th century BC, for coining gold and electrum; the Lydian innovation of manufacturing coins under the authority of the state spread to neighboring Greece, where a number of city-states operated their own mints. Some of the earliest Greek mints were within city-states on Greek islands such as Crete. At about the same time and mints appeared independently in China and spread to Korea and Japan; the manufacture of coins in the Roman Empire, dating from about the 4th century BC influenced development of coin minting in Europe. The origin of the word "mint" is ascribed to the manufacture of silver coin at Rome in 269 BC at the temple of Juno Moneta; this goddess became the personification of money, her name was applied both to money and to its place of manufacture. Roman mints were spread across the Empire, were sometimes used for propaganda purposes; the populace learned of a new Roman Emperor when coins appeared with the new Emperor's portrait.
Some of the emperors who ruled only for a short time made sure. Ancient coins were made by striking between engraved dies; the Romans cast their larger copper coins in clay moulds carrying distinctive markings, not because they knew nothing of striking, but because it was not suitable for such large masses of metal. Casting is now used only by counterfeiters; the most ancient coins were cast in bulletshaped or conical moulds and marked on one side by means of a die, struck with a hammer. The "blank" or unmarked piece of metal was placed on a small anvil, the die was held in position with tongs; the reverse or lower side of the coin received a “rough incuse” by the hammer. A rectangular mark, a “square incuse,” was made by the sharp edges of the little anvil, or punch; the rich iconography of the obverse of the early electrum coins contrasts with the dull appearance of their reverse which carries only punch marks. The shape and number of these punches varied according to their weight-standard. Subsequently, the anvil was marked in various ways, decorated with letters and figures of beasts, still the anvil was replaced by a reverse die.
The spherical blanks soon gave place to lenticular-shaped ones. The blank was struck between cold dies. One blow was insufficient, the method was similar to that still used in striking medals in high relief, except that the blank is now allowed to cool before being struck. With the substitution of iron for bronze as the material for dies, about 300 AD, the practice of striking the blanks while they were hot was discarded. In the Middle Ages bars of metal were hammered out on an anvil. Portions of the flattened sheets were cut out with shears, struck between dies and again trimmed with shears. A similar method had been used in Ancient Egypt during the Ptolemaic Kingdom, but had been forgotten. Square pieces of metal were cut from cast bars, converted into round disks by hammering and struck between dies. In striking, the lower die was fixed into a block of wood, the blank piece of metal laid upon it by hand; the upper die was placed on the blank, kept in position by means of a holder round, placed a roll of lead to protect the hand of the operator while heavy blows were struck with a hammer.
An early improvement was the introduction of a tool resembling a pair of tongs, the two dies being placed one at the extremity of each leg. This avoided the necessity of readjusting the dies between blows, ensured greater accuracy in the impression. Minting by means of a falling weight intervened between the hand hammers and the screw press in many places. In Birmingham in particular this system became developed and was long in use. In 1553, the French engineer Aubin Olivier introduced screw presses for striking coins, together with rolls for reducing the cast bars and machines for punching-out round disks from flattened sheets of metal. 8 to 12 men took over from each other every quarter of an hour to maneuver the arms driving the screw which struck the medals. The rolls were driven by horses, mules or water-power. Henry II came up against hostility on the par
The Deutsche Mark, abbreviated "DM" or "D-Mark", was the official currency of West Germany from 1948 until 1990 and the unified Germany from 1990 until 2002. It was first issued under Allied occupation in 1948 to replace the Reichsmark, served as the Federal Republic of Germany's official currency from its founding the following year until the adoption of the euro. In English it is called the "Deutschmark"; the Germans called it D-Mark when referring to the currency, Mark when talking about individual sums. In 1999, the Deutsche Mark was replaced by the Euro; the Deutsche Mark ceased to be legal tender upon the introduction of the euro — in contrast to the other eurozone nations, where the euro and legacy currency circulated side by side for up to two months. Mark coins and banknotes continued to be accepted as valid forms of payment in Germany until 28 February 2002; the Deutsche Bundesbank has guaranteed that all German marks in cash form may be changed into euros indefinitely, one may do so in person at any branch of the Bundesbank in Germany.
Banknotes and coins can be sent to the Bundesbank by mail. In 2012, it was estimated that as many as 13.2 billion marks were in circulation, with one poll showing a narrow majority of Germans favouring the currency's restoration. On 31 December 1998, the Council of the European Union fixed the irrevocable exchange rate, effective 1 January 1999, for German mark to euros as DM 1.95583 = €1. One Deutsche Mark was divided into 100 Pfennige. A mark had been the currency of Germany since its original unification in 1871. Before that time, the different German states issued a variety of different currencies, though most were linked to the Vereinsthaler, a silver coin containing 16 2⁄3 grams of pure silver. Although the mark was based on gold rather than silver, a fixed exchange rate between the Vereinsthaler and the mark of 3 marks = 1 Vereinsthaler was used for the conversion; the first mark, known as the Goldmark, was introduced in 1873. With the outbreak of World War I, the mark was taken off the gold standard.
The currency thus became known as the Papiermark as high inflation hyperinflation occurred and the currency became made up of paper money. The Papiermark was replaced by the Rentenmark from November 15, 1923, the Reichsmark in 1924. During the first two years of occupation the occupying powers of France, United Kingdom, United States, the Soviet Union were not able to negotiate a possible currency reform in Germany. Due to the strains between the Allies each zone was governed independently as regards monetary matters; the US occupation policy was governed by the directive JCS 1067, which forbade the US military governor "to take any steps to strengthen German financial structure". As a consequence a separate monetary reform in the U. S. zone was not possible. Each of the Allies printed its own occupation currency; the Deutsche Mark was introduced on Sunday, June 20, 1948 by Ludwig Erhard. The old Reichsmark and Rentenmark were exchanged for the new currency at a rate of DM 1 = RM 1 for the essential currency such as wages, payment of rents etc. and DM 1 = RM 10 for the remainder in private non-bank credit balances, with half frozen.
Large amounts were exchanged for RM 10 to 65 Pfennig. In addition, each person received a per capita allowance of DM 60 in two parts, the first being DM 40 and the second DM 20. A few weeks Erhard, acting against orders, issued an edict abolishing many economic controls, implemented by the Nazis, which the Allies had not removed, he did this, as he confessed, on Sunday because the offices of the American and French occupation authorities were closed that day. He was sure; the introduction of the new currency was intended to protect western Germany from a second wave of hyperinflation and to stop the rampant barter and black market trade. Although the new currency was only distributed in the three western occupation zones outside Berlin, the move angered the Soviet authorities, who regarded it as a threat; the Soviets promptly cut off all road and canal links between the three western zones and West Berlin, starting the Berlin Blockade. In response, the U. S. and Britain launched an airlift of food and coal and distributed the new currency in West Berlin as well.
Since the 1930s, prices and wages had been controlled. That meant that people had accumulated large paper assets, that official prices and wages did not reflect reality, as the black market dominated the economy and more than half of all transactions were taking place unofficially; the reform replaced the old money with the new Deutsche Mark at the rate of one new per ten old. This wiped out 90% of government and private debt, as well as private savings. Prices were decontrolled, labor unions agreed to accept a 15% wage increase, despite the 25% rise in prices; the result was the prices of German export products held steady, while profits and earnings from exports soared and were poured back into the economy. The currency reforms were simultaneous with the $1.4 billion in Marshall Plan money coming in from the United States, used for investment. In addition, the Marshall plan forced German companies, as well as those in all of Western Europe, to moder
A central bank, reserve bank, or monetary authority is the institution that manages the currency, money supply, interest rates of a state or formal monetary union, oversees their commercial banking system. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, generally controls the printing/coining of the national currency, which serves as the state's legal tender. A central bank acts as a lender of last resort to the banking sector during times of financial crisis. Most central banks have supervisory and regulatory powers to ensure the solvency of member institutions, to prevent bank runs, to discourage reckless or fraudulent behavior by member banks. Central banks in most developed nations are institutionally independent from political interference. Still, limited control by the executive and legislative bodies exists. Functions of a central bank may include: implementing monetary policies. Setting the official interest rate – used to manage both inflation and the country's exchange rate – and ensuring that this rate takes effect via a variety of policy mechanisms controlling the nation's entire money supply the Government's banker and the bankers' bank managing the country's foreign exchange and gold reserves and the Government bonds regulating and supervising the banking industry Central banks implement a country's chosen monetary policy.
At the most basic level, monetary policy involves establishing what form of currency the country may have, whether a fiat currency, gold-backed currency, currency board or a currency union. When a country has its own national currency, this involves the issue of some form of standardized currency, a form of promissory note: a promise to exchange the note for "money" under certain circumstances; this was a promise to exchange the money for precious metals in some fixed amount. Now, when many currencies are fiat money, the "promise to pay" consists of the promise to accept that currency to pay for taxes. A central bank may use another country's currency either directly in a currency union, or indirectly on a currency board. In the latter case, exemplified by the Bulgarian National Bank, Hong Kong and Latvia, the local currency is backed at a fixed rate by the central bank's holdings of a foreign currency. Similar to commercial banks, central banks incur liabilities. Central banks create money by issuing interest-free currency notes and selling them to the public in exchange for interest-bearing assets such as government bonds.
When a central bank wishes to purchase more bonds than their respective national governments make available, they may purchase private bonds or assets denominated in foreign currencies. The European Central Bank remits its interest income to the central banks of the member countries of the European Union; the US Federal Reserve remits all its profits to the U. S. Treasury; this income, derived from the power to issue currency, is referred to as seigniorage, belongs to the national government. The state-sanctioned power to create currency is called the Right of Issuance. Throughout history there have been disagreements over this power, since whoever controls the creation of currency controls the seigniorage income; the expression "monetary policy" may refer more narrowly to the interest-rate targets and other active measures undertaken by the monetary authority. Frictional unemployment is the time period between jobs when a worker is searching for, or transitioning from one job to another. Unemployment beyond frictional unemployment is classified as unintended unemployment.
For example, structural unemployment is a form of unemployment resulting from a mismatch between demand in the labour market and the skills and locations of the workers seeking employment. Macroeconomic policy aims to reduce unintended unemployment. Keynes labeled any jobs that would be created by a rise in wage-goods as involuntary unemployment: Men are involuntarily unemployed if, in the event of a small rise in the price of wage-goods to the money-wage, both the aggregate supply of labour willing to work for the current money-wage and the aggregate demand for it at that wage would be greater than the existing volume of employment.—John Maynard Keynes, The General Theory of Employment and Money p11 Inflation is defined either as the devaluation of a currency or equivalently the rise of prices relative to a currency. Since inflation lowers real wages, Keynesians view inflation as the solution to involuntary unemployment. However, "unanticipated" inflation leads to lender losses as the real interest rate will be lower than expected.
Thus, Keynesian monetary policy aims for a steady rate of inflation. A publication from the Austrian School, The Case Against the Fed, argues that the efforts of the central banks to control inflation have been counterproductive. Economic growth can be enhanced by investment such as more or better machinery. A low interest rate implies that firms can borrow money to invest in their capital stock and pay less interest for it. Lowering the interest is therefore considered to encourage economic growth and is used to alleviate times of low economic growth. On the other hand, raising the interest rate is used in times of high economic growth as a contra-cyclical device to keep the economy from overheating and avoid market bubbles. Further goals of monetary policy are stability of interest rates, of the financial market, of the foreign exchange market. Goals cannot be separated fr