States, Debt, and Power: 'Saints' and 'Sinners' in European History and Integration Kenneth Dyson p.iv) Great Clarendon Street, Oxford, ox2 6dp, United Kingdom Oxford University Press is a department of the University of Oxford It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Kenneth Dyson 2014 The moral rights of the author have been asserted First Edition published in 2014 Impression: All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2014931571 ISBN 978–0–19–871407–1 Printed and bound by CPI Group (UK) Ltd, Croydon, CR0 4YY Links to third party websites are provided by Oxford in good faith and for information only Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work Dedication (p.v) With thanks and love to my son Charles George, for reminding me of what is most important in life Contents Title Pages Dedication [UNTITLED] Acknowledgements List of Tables List of Abbreviations Archival Sources Prologue Contextualizing Debt The Nature of Sovereign Creditworthiness Moralizing Credit Part I Debt and Political Rule in European History The Evolution of Public Debt Financial Repression, Debasement, and the Historic Arc of Default Theological Traces and Social Contexts The Dynamics of Public Debt in Historical Perspective Part II Law, Culture, and Statecraft Law, Public Debt, and the Paradoxes of Power Economic Cultures, Ideologies of Debt, and State Virtue 10 Space, Time, and Statecraft Part III State Liability and Territorial Control 11 States and Financial Markets 12 Professional Consensus, Political Silence, and Sovereign Creditworthiness 13 The Dynamics of External Imbalances and Debt 14 Which Truth? The Power of Numeric Indicators and Probabilistic Reasoning about Public Debt 15 Public Debt Dynamics 16 Public Debt and Multilevel Statehood hierarchy of states 60 historical memory 265, 600 imaginative literature 65–6, 81 master and slave morality 81 media 639 merchant-financiers 164–7, 173 morality 10, 65–6, 81, 84–5, 95–6 mutual trust 633 national identity 92, 262–3 new Europe 583 populist mobilization 31, 134, 619, 622, 631 procedural rules 80 saints and sinners 81 (p.770) state power 13, 239–40 statecraft 287, 289 sub-national governance 511, 516, 530, 532, 543–4 wars and war debts, financing 154, 563–4, 570 World War I 563–4, 570 virtue capacity of states and political will 485–6 central banks 268 classical economic theory, virtuous household in 78–9 creditor-debtor state relations 9, 13, 16, 293–4 economic culture and ideologies of debt 263, 265–7, 272, 284–5 elite magnificence, culture of 269–71 European integration and state virtue 284–5 Europeanization 284 globalization 284 governing elites 63, 284 household debt 68, 76–9, 136, 189, 222, 224, 273, 276, 503 illusion, hubris and complacency 284 imaginative literature 86–90 inclusive and protection, tension between 285 integration 284–5 living within one’s means 67–8, 189, 581 mocking 76 political rule, changing relationship between debt and 108 saints and sinners 12, 95 social welfare culture 279 sovereign creditworthiness 13, 16, 39, 284 stability culture 273, 275 state power 12–13, 299 sub-national governance 556, 559 tax state to debt state, from 284–5 thrift, discipline, and prudence 189 tyranny 16 vulture funds 239, 246 Wales 511–18, 521, 526, 531, 554–6 wars and war debts, financing see also particular wars Anglo-centric narratives 124 banks, dependency on 228 BIS 571 bonds 228–9 capacity of states and political will 101 city-states 118–19 core-periphery 160–1 defaults 134–40, 142–3 deflation 158, 213 demographic shift to ageing population 229, 638 elite magnificence, culture of 271 evolution of public debt 102–3, 113 exceptionalism 228 expectations, rise in 229 fiscal-military regimes 178 fiscal normality 484 formal economic reasoning, limits of 197–8, 229, 231, 233 gold standard 566–8 hierarchy 177 historical context 38, 228–9 imaginative literature 86 inflation 156–8 Jewish merchant- financiers 174 Keynesianism 79 League of Nations 570 merchant-financiers 139 national identity 228 new social interests 229 opacity 38 papacy 119 political agenda 229 public opinion 228 rentier class 17, 143, 229, 335 repudiation of debts 229 scale of war 75 spatial scale of wars, increase in 229 sustainable debt 84 technology 75 total war 75, 229 trickery 38 victimhood and resentment 154, 563–4, 570 welfare state 229 Washington Consensus 371–2 Waterloo, Battle of 38, 103, 126, 201 Weimar 90 welfare protection culture 266–8, 280–5, 292–3, 305, 399–400 arc of default 281 big but weak state, paradox of 281–2 chronic debtor states 292–3, 298–9 collective memory 282 core-periphery 281–3 cultural nostalgia, folklore and myths 281–2 economic culture and ideologies of debt 266–7, 268, 280–3 elite magnificence, culture of 280–1 EMU 283 Europeanization/de- Europeanization 283 expenditure 209–10, 229, 279, 470 globalization, retreat from 283 governing elites 281–3 illusion, hubris and complacency 283 insider-outsider problem 283 legitimacy 282 marginalization or displacement 283 modernization 283 opacity, gimmickry, and manipulation 280 patronage 280–2 rent-seeking behaviour 281 social welfare culture 284 stability culture 280–1 state power, paradox of 281–2 statecraft 281, 303 sub-national governance 533 victimhood and resentment 281–2 welfare state see also welfare protection culture ageing population 1, austerity, institutionalization of automatic stabilizers 196–7 capacity of states and political will (p.771) communitarian model of society 187–8 consumer culture 229, 277 defaults 142 dependency culture entitlement 7, 78, 187–9 entrenched social entitlements exchange rate crisis of 1970s expectations, raising 229 extended family 229, 231, 472 external security threats financial and economic crisis post -2007 fiscal state 175–6 formal economic reasoning, limits of 197, 231, 233 franchise extension 229 generational accountancy 472 measurement of public finances 31 public opinion 188 social partnership arrangements 188 stakeholders 188 sustainable debt tax and national insurance 1–2 tax state, development of wars and war debts, financing 229 white collar crime 350 women, vulnerability of 86, 87, 91 words as weapons 286, 289–90, 302–3, 315 World Bank 359, 369–70 contagion 21 collective financial assistance mechanisms 49 defaults 143 exchange rates 335 external imbalances and debt 21, 406, 411–12, 418, 436–41, 447 ICSID Convention 242 IMF 370–1 Institute of International Finance 396 management of public debt 258 retaliatory measures 21 sovereign creditworthiness 48 transport and communications, changes in 110 World War I creditor-debtor state relations 411 culture 189 defaults 138, 149–50, 217 external imbalances and debt 292 extraordinary public finance 71 financial elites 161 financial markets 447 formal economic reasoning, limits of 198 gold standard 133, 567 governing elites 600, 638 illusion, hubris and complacency 38 industrial development 206 inflation 156, 158, 207 League of Nations 570 money, printing 211 nationalism 638 new social interests 187 populist mobilization 600 public debt/GDP ratio 201, 217 reckless creditors and feckless debtors 143 rentier class 143, 212–13, 335 resentment and humiliation 563–4, 570 self-made wealth 186 sovereign creditworthiness 186, 189 World War II BIS 571 creditor-debtor state relations 411, 564, 595 culture 189, 265 defaults 138 external imbalances and debt 292 formal economic reasoning, limits of 198 governing elites 600, 638 illusion, hubris and complacency 38 inflation 156 Keynesianism 575–6 nationalism 638 public debt/GDP ratio 143, 201, 204, 207, 210, 217 Ruhr Occupation 158, 213, 288, 310 victimhood and resentment 265, 282 write-down, definition of 656 write-off, definition of 656 yield, definition of 657 yield curve, definition of 657 Young Plan 104 (p.703) Name Index Abbott, John ‘Jackie’ 103 Abs, Hermann 594 Acciaiuouli family 139 Admati, A 348 Aizenman, J 312 Akerlof, G 85 Alesina, Alberto 49 Alexander I, emperor of Russia 182 Alexander, Karl, duke of Württemberg 174 Andreotti, Giulio 223 Antony, Mark 116 Aristotle 64, 66, 74, 84–5, 95, 164, 264, 270–1, 276, 285 Arnold and Porter 252 Aschauer, D 193 Atatürk, Mustafa Kemal 138, 149 Augustine of Hippo, saint 31 Augustus II the Strong, elector of Saxony and king of Poland 100, 132–3, 174 Augustus (Octavian), Roman emperor 116 Aurelian, Roman emperor 117 Balzac, Honoré de 66–7, 86–7, 91 Bardi family 19, 36, 100, 104, 107, 113, 138–9, 361 Baring, Alexander 113 Baring, Evelyn 153–4 Barre, Raymond 606 Barro, Robert 49 Barroso, José Manuel 585, 586 Bassanini, Franco 524 Baudelaire, Charles 86, 91 Bazard, Saint-Amand 165–6 Beaufort, Henry, Cardinal-Bishop 169 Behrens, Leffmann 174 Bentham, Jeremy 165 Berger, J 277 Berlusconi, Silvio 223, 548, 550, 624 Bethmann brothers 124 Bethmann Hollweg, Theobald von 211 Beyle, Marie-Henri (Stendahl) 202 Bismarck, Otto von 19, 27, 101–2, 172, 175, 182–3 Blanchard, Olivier 49 Bleichröder, Gerson von 19, 27, 172, 182–5, 336 Blunt, John 73 Bodin, Jean 70 Bolingbroke, Henry St John, 1st Viscount 87 Bonsignori family 36 Bourbon family of Spain 37 Brady, Nicholas F 248–9, 362 Brandt, Willy 302, 609 Bravo Murillo, Juan 146, 227 Brown, Gordon 362, 379 Brüning, Heinrich 572–3, 581 Buchheit, Lee 48, 244 Calman, Kenneth 555–6 Calvin, John 165, 267, 273–4, 503 Calvo, Guillermo 49 Camacho, Juan 146, 227, 406 Cameron, David 498, 555, 625 Caracalla, Roman emperor 117 Carli, Guido 602 Catherine II, queen of Russia (Catherine the Great) 113, 273 Cavour, Camille de 27, 217, 220 Cecchetti, S 465 Cecil, Robert (Salisbury, Lord) 145 Cervantes, Miguel de 86 Charlemagne, king of the Franks, Holy Roman Emperor 129, 160 Charles II, king of England 122, 124, 171 Charles V, Holy Roman Emperor 100–1, 103–6, 132, 140, 161, 165, 167 Charles XI, king of Sweden 112 Charles XII, king of Sweden 179 Chekhov, Anton 86, 89 Churchill, Winston 568 Cicero 101 Cimon 114 Comnenus, Alexios 117, 167 Constantine, Roman emperor (Constantine the Great) 117 Cooke, Jay 93 Crispi, Francesco 221 Crockett, Andrew 379 Cromwell, Oliver 122 Cromwell, Thomas 113, 171 Cunliffe, Walter 568 Dante Alighieri 164 Dawes, Charles G 104, 137, 154, 158, 213, 309, 447, 569, 571 de Gaulle, Charles 606–7, 611, 625 de Hooghe, Romeyn 272 de la Pole, William 113 de Larosière, Jacques 367, 589, 615 de Staël, Germaine 162, 180 De Stefani, Alberto 223 Defoe, Daniel 70, 86, 126 Delors, Jacques 572, 580, 592, 608–11, 613 Den Uyl, D 75 Destutt, Antoine, Comte de Tracy 74 Diamond, Bob 353–4 Dickens, Charles 67, 69, 86–7, 90–1 (p.704) Dietzel, Karl 5,9, 35, 74, 488, 494 Diocletian, Roman emperor 117 Disraeli, Benjamin 184 Dom Miguel I, king of Portugal 146 Doria family 135, 139 Downing, George 122, 124 Draghi, Mario 110, 286, 379, 387, 460, 580, 585–6, 616, 621, 645 Drumont, Édouard 175 Ducci, Gaspar 105, 160 Dudley, Edmund 104–5 Duncombe, Charles 171 Edward I, king of England 38, 100, 106, 129, 138–40, 166, 173, 178, 411 Edward II, king of England 37 Edward III, king of England 38, 100, 113, 129, 138–9, 312 Edward IV, king of England 129, 131 Edward VI, king of England 103 Eisenstein, L 284 Eliot, George 33, 89 Elizabeth I, queen of England 103, 113, 117, 160, 167 Enfantin, Prosper 77, 165 Enmetena, king of Lagash 69 Ephraim, Nathan Veitel Heine 174–5 Eppes, John Wayles 73–4 Erasmus, Desiderius 267, 274 Erhard, Ludwig 594, 603, 607 Eucken, Walter 572 Ferdinand I, Holy Roman Emperor 104 Ferdinand II, king of Spain 146, 172 Ferdinand VII, king of Spain 225, 228 Fielding, Henry 66, 86–8 Finn, M 87 Flaubert, Gustav 89 Fould, Achille 182, 184, 202, 217 Fould family 171, 182, 184, 202, 217 Fouquet, Nicolas 167, 178 Francis I, king of France 70, 100–1, 104–5, 132, 161, 169–70, 176–7, 270 Franco, Francisco 146, 155, 228, 232, 281, 456, 542–3 Franklin, Benjamin 293 Frederick I, king of Prussia 174 Frederick II, king of Prussia (Frederick the Great) 38, 90, 100, 131, 174–5, 183, 275 Frederick William II, king of Prussia 175 Frege family 124 Frescobaldi family 104, 139, 166, 171, 178 Freud, Sigmund 94 Freytag, Gustav 274 Fugger family 19, 27, 36, 100, 104, 106–7, 113, 132, 139, 160, 165, 243, 361 Fuld, Richard 353 Galbraith, John Kenneth 402 Galdós, Benito Pérez 66–7, 87–8 Gallatin, Albert 73 Gamboa, Fernández 227 Garciá de Barzanallana, Manuel 227 Geithner, Timothy 419 Giscard d’Estaing, Valéry 362 Giudi family 129, 166 Gladstone, William 153, 215, 217 Goethe, Johann Wolfgang von 14–15, 77, 90, 275 Graeber, D 69 Gregory, pope 173 Gresham, Thomas 103, 114, 167 Grimaldi family 104, 135, 139 Grotius, Hugo 238, 274 Guicciardini, Francesco 118, 119 Guidi, Biche 129, 166, 171 Guidi, Mouche 129, 166, 171 Hambro family 145, 185 Hamilton, Alexander 5, 56–7, 70, 73, 200 Hansemann, Adolph von 183–4 Hardenberg, Karl-August 182 Hare, R 94 Hargreaves, E 215 Hausmann, Georges-Eugène (Baron Haussmann) 202 Hawtrey, Ralph 567–8 Hegel, Friedrich 80 Hellwig, M 348 Henderson, Hubert 296, 573–6 Henry II, king of France 38, 70, 107, 120, 123, 169, 172, 411 Henry III, king of England 173 Henry III, king of France 37, 102 Henry IV, king of France 134, 171 Henry V, king of England 38, 169 Henry VI, king of England 27, 37, 132, 167, 169 Henry VII, king of England 111, 160, 166–7, 170, 178 Henry VIII, king of England 27, 38, 103, 104, 113, 129, 131–2, 165, 169–71, 270, 311– 12, 411–12 Hitler, Adolf 92, 175, 265–6 Hobbes, Thomas 36, 237, 239, 242, 260, 309, 577 Hollande, Franỗois 364, 622, 628 Holtham, Gerald 556 Hottinguer family 184 Hume, David 4, 5, 51, 66, 70–6, 191, 488 Ibsen, Henrik 86, 89 Innocent IV, pope 166 Isabella I, queen of Spain 172 Issing, Otmar 615 Jefferson, Thomas 5, 70, 72–5 Julius II, pope 166 Julius Caesar, Gaius 116 Juncker, Jean-Claude 585, 630 Justi, Johann Heinrich Gottlob von 70–1 Kant, Immanuel 85, 238–9 Kenen, P 246 Keynes, John Maynard 51, 78–9, 83, 197, 237–8, 276, 279–80, 296, 344–5, 372, 419, 567– 8, 573–7, 581, 613–14 Kindersley, Guy 296, 573–4 King, Mervyn 110 Kipling, Rudyard 15–16 Kleberg, Hans 169 Kletzer, Kenneth 49 Kohl, Helmut 580, 585, 609–12, 614, 630 Kreuger, Ivar 104, 246, 253 Krievel, Jérôme 350 Lafontaine, Oskar 613 Lambermont, Auguste 541 Lamfalussy, Alexandre 367, 378, 572, 608 Lamont, Thomas 104 Lana, Giovanni 223 Larraz López, José 228 (p.705) Law, John 27, 71, 76, 121–2, 156, 271 Lazard family 145, 172 Leeson, Nick 350 Lehmann, Berend 174 Leone X, pope 173 Leroy-Beaulieu, P 124 Liikanen, Erkki 346 Lijphart, A 498 Lloyd George, David 217 568 Locke, John 238–9, 577 Louis IX, king of France 102, 113, 119–20, 128–9, 169–70, 173 Louis XIII, king of France 131, 167 Louis XIV, king of France 37, 38, 102, 121, 134, 141, 167, 218, 271 Louis XV, king of France 121 Louis XVI, king of France 37, 171 Louis-Philippe I, king of France 111, 182, 201–2 Luccan merchant bankers 27 Ludwig II, king of Bavaria 37, 141 Luther, Martin 164, 267, 503 MacKenzie, Donald 325 Madoff, Bernie 354 Mahmud II, sultan 130 Mallet family 172, 184 Mandeville, Bernard de 70, 75–7, 272, 274 Mangoldt, Hans Karl von 602 Mann, Thomas 90 Marion, N 312 Marshall, George 593–4,601–2 Mary I, queen of England 113 Mazarin, Jules, Cardinal 167, 178 Mazzucato, M 3, Meciar, Vladimir 500 Medici family 19, 36, 100, 104, 107, 139, 361 Mehmed II, sultan (the Conqueror) 177 Mehmet II, sultan 130–1 Melon, Jean-Franỗois 70, 76 Merkel, Angela 16, 29, 68, 92, 247, 364, 564, 609, 614, 621, 624–6, 628, 630 Metternich, Klemens Wenzel von, prince 101, 183, 361 Miguel I, king of Portugal (Dom Miguel) 146 Mill, John Stuart 68, 78 Mitterrand, Franỗois 551, 599, 611 Mohanty, M 465 Mon, Alejandro 227 Montesquieu, Charles de 46, 71–2, 74, 75 Monti, Mario 29, 223, 429, 550, 626, 631 Moore, S 219–20 Moreau, Émile 110, 125, 412, 569, 571 Morgan, J Pierpont 200, 336 Mussolini, Benito 104, 221 Napoleon Bonaparte 38, 103, 112–13, 156, 169, 171 Napoleon III, emperor of France 77, 171, 175, 179, 182–4, 202, 204, 221, 228, 310, 565 Nasi-Mendes family 103,172 Necker, Jacques 111, 122, 171, 180 Nero, Roman emperor 117 Neruda, Pablo 634 Nietzsche, Friedrich 16, 66, 68–9, 81, 85, 634 Nilus, Sergei 175 Nixon, Richard 21 Norman, Montagu 110, 133, 412, 563, 570–1, 573–4, 577, 581, 621 Oppenheimer family 172 Oppenheimer, Joseph Süss 174 Oppenheimer, Samuel 19, 174 Padoa-Schioppa, Tommaso 48, 223 Papandreou, George 501 Parker Gilbert, Seymour 154 Palmerston, Lord (Temple, Henry John) 151 Paris brothers 111 Pašić, Nikola 150–1 Paterson, William 218 Peel, Robert 151, 215 Pelham, Henry 121 Pericles 270 Perotti, Roberto 49 Peruzzi family 19, 104, 107, 113, 138–9, 361 Philip II, king of Macedon 116 Philip II, king of Spain 38, 100, 120, 134–6, 138–40, 161, 176–7, 243, 248, 313 Philip II Augustus, king of France 101–2, 168–9, 173, 176–7 Philip III, duke of Burgundy (Philip the Good) 128 Philip IV, king of France 27, 102, 129, 131, 139, 166, 169–71, 173, 311–12, 412 Philip the Fair, duke of Burgundy 270 Pinto, Isaac de 70–1 Pitt, William (the Younger) 121 Plato 63, 66, 285, 634 Pocock, JGA 74 Pöhl, Karl-Otto 610 Poincaré, Raymond 38, 205 Poussin, Nicolas 41 Powell, Anthony 41 Prodi, Romano 223 Rabelais, Franỗois 757 Rajoy, Mariano 626 Reinhart, C 193, 298, 406, 408, 465 Reinhart, V 406, 408, 465 Ricardo, David 5, 73–5, 488, 655 Ricciardi family 19, 36, 100, 104, 106–7, 138–40, 166, 178 Richard I, king of England 38, 171 Richardson, Samuel 86–7 Richelieu, Armand Jean du Plessis, Cardinal de 100, 101–2, 167, 177–8 Rogoff, Kenneth 49, 193, 298, 406, 408, 465 Roosevelt, Franklin Delano 201, 574–5 Röpke, Wilhelm 572 Roth, Joseph 67, 86–8 Rothschild, James de 181, 182–4, 202 Rothschild, Mayer Amschel 174, 181 Rothschild, Nathan 113, 182, 336 Rotter, Christian von 182 Roubini, N 193 Rusnack, John 350 Sachs, J 193 Sadeh, T 498 Sadik Pasha, Mehmet 103 Saint-Simon, Claude 56, 77, 165, 202 Salaverría, Pedro 227 Salisbury, Lord (Cecil, Robert) 145 (p.706) Sarkozy, Nicolas 364, 624–6 Schacht, Hjalmar 110, 412, 569, 571, 573, 576, 600 Schama, Simon 274 Schlesinger, Helmut 591–3 Schmidt, Helmut 355, 357, 609 Schröder, Gerhard 614 Schumpeter, Joseph 16, 71, 262 Scipio Africanus 116 Scott, J 58 Scott, Walter 219 Sella, Quintino 223 Sellière family 184 Severus, Septimus, Roman emperor 117 Shakespeare, William 66, 68, 86, 91–2, 172, 302 Shiller, Robert 85, 609 Smith, Adam 5, 66, 70–6, 84–5, 92–3, 165, 191, 488 Spinola family 135, 139 St John, Henry, 1st Viscount Bolingbroke 87 Stark, Jürgen 614–16, 628 Stein, Lorenz von 4, 5, 9, 66, 70, 74, 262, 487–8 Steinbrück, Peer 497 Stendhal (Beyle, Marie-Henri) 202 Stieglitz, Alexander von 182 Stieglitz family 172, 182 Stieglitz, Ludwig 182 Stone, Oliver 319, 352 Stresemann, Gustav 158 Strozzi family 169 Sully 116 Sully, Maximilien 171 Swift, Jonathan 66, 71–2 Temple, Henry John (Palmerston, Lord) 151 terMeulen, Carel Eliza 570 Thiers, Adolphe 202 Thucydides 270 Tolstoy, Leo 69 Tomz, M 39, 266, 286, 309, 311 Tournon, Charles-Thomas Maillard de, Cardinal 169–70 Tremollini, Roberto 223 Trivers, Robert 16 Trollope, Anthony 86, 88 Van Rompuy, Herman 585–6 Vanoni, Ezio 223 Vaughan, Stephen 103, 113 Victor Emmanuel III, king of Italy 221 Villaverde, Fernández 146, 227–8 Vocke, Wilhelm 603 Volpi, Giuseppe 223 Voltaire, Franỗois de 66, 701, 767, 406 Wagner, Adolph 5, 9, 14, 35, 56, 66, 70, 262, 404, 457, 488 Walpole, Robert 122 Warburg family 172 Weber, Axel 615, 628 Weber, Max 267 Weidmann, Jens 275, 589–90 Wellesley, Arthur, 1st Duke of Wellington 113, 181 Welser family 104, 107, 113–4, 160 Werner, Pierre 608–11 Wertheimer, Sampson 174 Wicksell, Knut 567 William II, emperor of Germany 210 William III, king of England 121 William IV, prince of Orange-Nassau 71 Williams, Philip 282 Wright, Brian 49 Wright, M 311 Wulff, Liepmann Meyer 175 Xerxes I, king of Persia 114 Zampolli, F 465 Zola, Émile 67, 77, 87, 90–1 .. .States, Debt, and Power: ''Saints'' and ''Sinners'' in European History and Integration Kenneth Dyson p.iv) Great Clarendon Street, Oxford, ox2 6dp, United Kingdom Oxford University... creditor states and debtor states are intrinsic to European political life They are decisive in moulding its character and in forming an informal hierarchy amongst its states They are intrinsic... accountability and transparency, in disincentives to rent-seeking behaviour by governing and financial elites, in effective tax extraction, and in productive investment in infrastructure and building social