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Comment by dragonwriter | Hacker News Reader

> France has control over African monetary policy

As your own source notes, France does not control the policy of either of the two separate CFA franc zones, but does have preferential access to resources resulting from the deal setting up the currency arrangement, which is the actual benefit it gets from the deal.

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But the CFA being pegged to the euro, means that the countries adopting it can't really do monetary policy, like countries in the eurozone can't

At least Eurozone countries get a seat at the Eurogroup meetings and the European Council. African CFA users don't even get that.

Isn't it very common for a currency to be pegged to another, though? Dozens of currencies are pegged to the EUR or USD, and the two CFA francs are not very different, except that the French treasury is legally bound to guarantee free convertibility between CFA franc and euro, unlike say the US federal reserve with Cuban peso.

Yes, it is common. There are even countries that officially adopting a currency they do not control, e.g. Croatia uing the euro. But this has the very real drawbacks that the previous comments mentioned.

The pegging is not forced on them. It's their own national bank which buys and sells tons of Euros to keep the exchange rate stable.

Exactly, its an autonomous response towards the market. Stability is always preffered in human decision making.

> It's their own national bank which buys and sells tons of Euros to keep the exchange rate stable.

The two CFA franc zones have zone central banks (which aren't exclusively controlled by countries in the respective zone, since France has a seat on each), it's not individual national central banks issuing currency or managing the peg.

It also means their corrupt governments cannot monetise their debt and destroy their currency, savings, pensions, and ultimately economy.

Like Zimbabwe did.

That's nonsense. Zimbabwe (like the famous Weimar republic, by the way) had a extreme fall in the real productive capacity of the economy (1). Inflation was going to happen nevertheless the monetary policy they adopted.

(1) - http://bilbo.economicoutlook.net/blog/?p=3773

Nope, the fall in capacity followed the destruction of the currency and the end of the rule of contract law.

Googling briefly it seems

>Food production halved in the 1990s as a result of [Mugabe's] decision to strip white farmers of their land and hand it to members of the black population who, in many cases, had no farming experience.

before the inflation kicked off. https://news.sky.com/story/how-zimbabwes-economy-has-collaps...

Same brilliant policy in Venezuela pretty much.

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