Tentpole currency

In Messenian financial matters, a tentpole currency is one which is powerful and important enough to be used as a fixed point of reference in determining prevailing exchange rates in a region; these may be between the tentpole currency and another where enterprises in the two countries transact business or, more rarely, between two separate currencies which separately have agreed exchange rates with the tentpole currency. The tentpoles primarily serve their roles within the spheres of influence of each Great Power, though various forms of pan-Messenian monetary coordination have been attempted. At the present time four Messenian currencies are generally recognised as tentpole currencies; these are the Savamese aurel, the Siursk reylur, the Zepnish mark and (to a lesser extent) the Odannach bonn. The Ceresoran suna was also regarded as a tentpole currency prior to the Long War.

Early history

The historic use of precious metals – usually gold in the case of Messenian countries – had generally made it a straightforward process to determine a satisfactory exchange rate between two currencies, if the values of both were expressed in terms of a specific quantity of the metal. In Outer Joriscia this had been a provision of the 1845 Treaty of Tharamann, which mandated a set conversion rate into silver for the currencies of all signatory powers; however, the status of Azophin as the producer of most mined silver in Joriscia skewed much of the benefits of the system in their favour. Weaknesses in the arrangement manifested quite early; silver riots were an issue in Terophan as early as the late 1860s, and that country’s introduction of a fiat money system in the form of the paper vlod began a series of breaks from the silver standard established at Tharamann.

The Messenian system largely avoided the worst effects of changes in the supply of bullion (gold, silver, and bimetallism were all used by different areas during the Scales' Peace) by limiting convertibility; exchange controls were a routine feature of most Messenian states’ fiscal policy until comparatively recent times, and actual conversion rates were restricted to a limited series of groupings around key currencies, which supported the overall Messenian monetary system as tentpoles holding up a larger canvas. Requirements outside this limited framework were usually negotiated by the transacting parties; and the general absence of a developed interordinate currency market also limited (but did not entirely eliminate) opportunities for arbitrage by speculators. The first recorded use of the word “tentpole” in this context is by the Helmin finance minister (and later alráðherra) Sann Eldhress in a presentation to cabinet in Animare 1859.

20th century

In the period before about 1900 the typical arrangement was for a group of currencies to be defined against a particular tentpole currency dependent on its region, with the latter in turn being defined in terms of a set weight of bullion; thus the aurel became the usual point of reference for currencies in the Reform Cairan sphere, the bonn in the Orthodox Cairan states, the Zepnish guilder across most of the Palthic states, and the reylur in the further west of Messenia. The gradual abandonment of metallic standards across Messenia during the Creeping Crisis did not materially change this practice, although it did make periodic negotiations necessary between the treasury offices of most countries to ensure that these bilateral arrangements did not become imbalanced in favour of or against particular countries. These were done on a largely informal basis until 1937, when the process was put on a more structured footing by agreements reached during the Feijerpoort Convention of that year.

The matter was brought back to the table during the 1959 Congress of Kethpor, largely as a Siursk initiative aimed at eliminating the remaining imbalances in the existing Feijerpoort system and, in the view of Kjaran Hlyna, then thár of Siurskeyti, with an eye towards “binding together the world’s economies in such a way that none can be damaged without the aggressor himself taking damage.” Hlyna’s optimism proved severely misplaced; although parallel discussions were taking place among Joriscian states, there was very little appetite among the easterners for any cross-continental co-operation. Terophatic representatives stonewalled against the suggestion, and with Azophin – effectively under a Terophatic puppet administration at this point – likewise standing aloof, the idea gained no traction among the Joriscian states present. Savam and Zeppengeran, however, evinced some interest in the idea; and discussions continued after the official conclusion of the Congress, with representatives of the treasuries of all three countries meeting in Ostari in Petrial 1960 to convene the first meeting of what was to become the Laugar Board, officially the 'Standing Committee on Interordinate Finance and Exchange'. The city has since become the Board’s permanent base of operations, with its offices located in the eponymous city-centre Laugar district.

The Committee’s central responsibility was the creation of a separate “currency” – albeit one with no physical existence – weighed according to the currencies of the key Messenian powers. This was then used to clear trade imbalances, although it did not actually stabilise exchange rates, which would rather be adjusted to rebalance current accounts. At the suggestion of the Zepnish finance minister Wolfgang von Prenzweil, this central currency was named the ecumen, from the Old Messenian οἰκουμένη, “inhabited world” (Hártal ekúmen, Zepnish Ekumen, Savamese écumen but semi-formally abbreviated to écu, the name of a unit of currency used in pre-unification Dordanie). The ecumen effectively became “live” as at 1 Animare 1960.

In the initial years of this new Ostari System, most countries complied with the Laugar Board's clearing system, and monetary coordination reinforced the sense of a new Savamo-Zepnish hegemony in the Bielle Era. However, this guarantee also ultimately undid the ecumen regime. The fourth of Messenia’s major trading currencies, the Odannach bonn, was not considered in the system’s early years, in part due to Savamese resistance, but also due to the severe decline in value of the bonn during the Dark Years; Odann did not join the ecumen system until 1973. Within a few years, in 1976 Zeppengeran set its own rates for the mark during the Arisian War, part of its designs against Siurskeyti in the Straits Game and suspension of the alliance with Savam in the mésentente.

The ecumen clearing system collapsed and the tentpole currencies themselves became much more important during the 1980s, until when negotiations intending to halt the developing trade war agreed on a system of fixed exchange rates that practically amounted to a monetary union. This second iteration of the Ostari System lasted through the 1990s, mostly delivering on its promises of stability, although general inflation due to the Garden Wars caused much discontent with it and threatened its sustainability.

Recent developments

By themselves the tentpole currencies have reasserted independent policies after the 2000s commodity slump as part of the return of imperial protectionism. Explicit pegs within the blocs of each major power were re-established. A third Ostari System established in 2013 now allows tentpole currencies to fluctuate against the ecumen for flexibility.

In more recent years the development of the Savamese Customs Union has streamlined matters in its member nations, as several of them have given up their own currencies in favour of the aurel. This has not been universally popular, with a strong undercurrent of belief in the region that this deprives SCU states of an important tool of domestic economic policy, as well as opening the door to actual political integration of SCU states into the Savamese Empire. Savamese official insistence that aurelisation is not a requirement of membership in the SCU is taken with a grain of salt in other parts of Messenia. Conversion rates for formerly-used currencies such as the Brex-Sarre couronne were set at a somewhat more rigorous six significant figures (four are more usual in day-to-day transactions), but were generally more favourable to the “conceding” country than the prevailing ecumen rate (where applicable); this has widely been seen as the Quesailles treasury “sweetening the pot” to make the arrangement more palatable to opponents.