175 1 The Reichsbank’s prospective stance on monetary issues in 1940 Before considering the drawing-up of the Funk Plan of summer 1940 it is necessary to briefly outline the Reichsbank’s attitude towards the main monetary issues dealt with in the plan. This attitude was affected consider- ably by military developments in the earlier phase of war. A good perspective from which to approach this topic is that of the Reichsbank’s Economic Research Department (ERD), which provided the Reich’s central monetary institution with in-depth analyses of the state of the world economy and possible future scenarios. The topics at the centre of the ERD’s reflections can be broadly summarized under a few headings: economic and currency blocs; alternative exchange rate systems; role of gold in international transactions; relative price levels in Germany and other countries of the same economic area (or ‘greater space’); self-sufficiency inside each bloc; and finally the perspective of European unification. In a series of memos drawn up between March 1940 and the western campaign of the summer–autumn, the ERD considered relevant aspects of foreign monetary relations. A memo dated 8 March contained ‘an attempt to outline an economic programme for the peace to come’ 1 The future peace settlement, it was assumed, would significantly differ from the hated Versailles system in that it would seek to establish a balanced and stable world economy. The anonymous drafter predicted that the post-war era would witness a general tendency of capitalism to evolve into a state-reg- ulated economy, a metamorphosis that he pompously labeled ‘the end of capitalism’. While condemning the chaotic state intervention that most countries had introduced as a consequence of the Great Depression, the ERD official believed that in a post-war settlement the role of the state would be that of a looser controller of the economy, especially in reference to the 8 The Funk Plan By Paolo Fonzi A. Roselli, Money and Trade Wars in Interwar Europe © Alessandro Roselli 2014