Gold Bloc

a group of European countries (France, Belgium, Luxembourg, the Netherlands, Italy, Poland, and Switzerland) that maintained the gold standard and an unchanged parity of currencies during the world economic crisis of 1929–33. In a declaration at the international economic conference in London in 1933, these countries obligated themselves to extend mutual aid to maintain the rate of exchange of their currencies. However, the gold bloc was unable to ensure the stabilization of currencies. The deepening of the foreign exchange crisis led to the dissolution of the bloc. After devaluation of the US dollar (1934) and of the pound sterling, the export of goods became unprofitable for the gold bloc countries; therefore, conditions were created for the outflow of capital abroad. In 1934, Italy strengthened its foreign exchange restrictions. In 1935, Belgium and Luxembourg gave up the gold standard and devalued their currencies. Poland introduced a rigid foreign exchange control and prohibited the export of gold. In September 1936, France and subsequently the Netherlands and Switzerland abolished the gold standard, and, in October 1936, France and Italy devalued their currencies.