Where is the Voltaire of our times? As financial institutions and politicians wrangle over eurozone bonds and so on, they could do worse than think back to that great figure from Europe’s past. National indebtedness is after all not unique to the 21st century.
European states in the Enlightenment faced debt problems as chronic as we do, albeit for different reasons. They were not overspending on social programmes; they were waging senseless wars to shore up dynasties or bolster pride. The cost of paying off mercenaries virtually emptied their treasuries.
As Voltaire noted time and again, France was involved in just such adventures, propped up by debt financing. How did the French monarchy cover its exposure? By manipulating inflation, appealing to bankers, defaulting on repayments and raising taxes. Sound familiar?