How the Byzantines beat their credit crunch

Writing for the Guardian, Oxford historian Peter Frankopan finds a Byzantine-era parallel to the eurocrisis: In the 1070s, government revenues collapsed, while expenditure continued to rise on essential services (such as the military); these were made worse by a chronic liquidity crisis. So bad did the situation become that the doors of the treasury were ...

By , a former associate editor at Foreign Policy.
612621_histamenon_nomisma-constantine_viii-sb17762.jpg
612621_histamenon_nomisma-constantine_viii-sb17762.jpg

Writing for the Guardian, Oxford historian Peter Frankopan finds a Byzantine-era parallel to the eurocrisis:

Writing for the Guardian, Oxford historian Peter Frankopan finds a Byzantine-era parallel to the eurocrisis:

In the 1070s, government revenues collapsed, while expenditure continued to rise on essential services (such as the military); these were made worse by a chronic liquidity crisis. So bad did the situation become that the doors of the treasury were flung open: there was no point locking them, wrote one contemporary, because there was nothing there to steal.

Those responsible for the crisis were shown no mercy. The Herman Van Rompuy of the time, a eunuch named Nikephoritzes, was lambasted by an angry population faced with price rises and a fall in the standard of living and was eventually tortured to death. Widespread dissatisfaction led to others being unceremoniously removed from position, often forced to become monks, presumably so they could pray for forgiveness for their sins.[…]

The limp policies that were being tried were a disaster, having no effect whatsoever on fixing the problems. This included debasing the currency by pumping out more and more coins while reducing its precious metal content; a form of quantitative easing, in other words. It was like putting a plaster on a gunshot wound.

As the situation got worse, it was time for a clean sweep of the old guard. New blood was brought in, and with them came radical new ideas. A German bailout was one suggestion, although it failed to materialise, despite looking promising for a while. But as food ran short and talk turned to apocalypse, there was no choice but to take decisive action.

According to Frankopan, these solutions included revaluing the currency, reforming the tax code, and dropping barriers to international trade. He also makes the case that their administration of a large multi-national empire was more effient and advanced than they’re given credit for.

The EU’s regulations are political processes are often described as "byzantine," but in Frankopan’s view, that gives them a bit too much credit. 

Joshua Keating was an associate editor at Foreign Policy. Twitter: @joshuakeating

More from Foreign Policy

Keri Russell as Kate Wyler walks by a State Department Seal from a scene in The Diplomat, a new Netflix show about the foreign service.
Keri Russell as Kate Wyler walks by a State Department Seal from a scene in The Diplomat, a new Netflix show about the foreign service.

At Long Last, the Foreign Service Gets the Netflix Treatment

Keri Russell gets Drexel furniture but no Senate confirmation hearing.

Chinese President Xi Jinping and French President Emmanuel Macron speak in the garden of the governor of Guangdong's residence in Guangzhou, China, on April 7.
Chinese President Xi Jinping and French President Emmanuel Macron speak in the garden of the governor of Guangdong's residence in Guangzhou, China, on April 7.

How Macron Is Blocking EU Strategy on Russia and China

As a strategic consensus emerges in Europe, France is in the way.

Chinese President Jiang Zemin greets U.S. President George W. Bush prior to a meeting of APEC leaders in 2001.
Chinese President Jiang Zemin greets U.S. President George W. Bush prior to a meeting of APEC leaders in 2001.

What the Bush-Obama China Memos Reveal

Newly declassified documents contain important lessons for U.S. China policy.

A girl stands atop a destroyed Russian tank.
A girl stands atop a destroyed Russian tank.

Russia’s Boom Business Goes Bust

Moscow’s arms exports have fallen to levels not seen since the Soviet Union’s collapse.