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Lecture 17

HIS103Y Lecture 17 November 16th The Eclipse of France: Part II

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Vasilis Dimitriadis

HIS103Y Lecture 17 November 16 th The Eclipse of France: Part II • The financial legacy of the 7 Years War crippled France politically and economically • France was no longer able to intervene in continental matters due to financial problems, the Partition of Poland is a key example of this. • August 1772, 1 Partition of Poland o Russia became the power in Black Sea and potential power in Mediterranean. • August 1774, Russia modelling Christendom o 1787, no French help for the Turks -> Russian victories.  France was busy overseas even after the Peace of Paries. – Lost colonies to Britain. • France’s debt already crippling the economy continued to get worse due to foreign policy adventures by the French government • The main function of the 18th century state was war and to finance this continual war effort • The main problem was that none of the Great European powers was able to financially support their own war effort since their economies never had the chance to fully recover from the last war or able to function under continual wartime conditions. • There was three option to try and get more money to finance the war effort o Print more money – which in turn dramatically reduced the actual value of the countries currency o Increase taxation – which over many years of war becomes unpopular with the people and causes civil unrest and breaks a countries resolve to continue the war o Borrow money from other nations – this also causes future problems for the countries economy since the country is forever paying back money and thus their economy is never fully able to recover • The downside of these methods is: inflation economic and social unrest, governments become unpopular creditors become wary of lending money • Three French finance ministers tried to incorporate honesty, accountability and legitimacy into their jobs. 1754-1759 were Moreau de Sechelles, Pyrenec de Moras, Boullongne • This led to an even further increase to social unrest and economic instability • By refusing to turn to manipulation of currency and increasing taxation, they turned to borrowing • However, the 7 Years War turned out to be much more expensive, so eventually taxes increased and the debt of the state grew faster • The American War of Independence in France’s view was seen as an opportunity to reverse the losses of the 7 Years War • Vergennes: as a mercantilist, France would have to take Britain’s commercial empire to increase its own. Vergennes wanted to do this to increase French power in continental Europe in light of Frances past neutrality i
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