THE TWILIGHT OF THE GOLD BLOC becoming increasingly panicky. There was a great deal of indiscriminate buying of commodities and prices were rising rapidly.

In the circumstances the new Government had no choice but to abandon the defence of the parities. In practice, the belga had already departed from its parity before the new Government assumed office and all that was required was to recognise legally what had become a fact in practice. Although some quarters would have preferred Belgium to join the Sterling Bloc, the Government decided to resort to a straightforward devaluation to the extent of 28 per cent. At its lower level, the belga continued to be linked to gold. Simultaneously with the devaluation of the belga, the Government made a series of proposals, some of which were distinctly reflationary in character. In reality, there was no need to stimulate reflation since prices tended to rise in any case. The Belgian nation, with its experience of post-war inflation, is essentially inflation minded, and the task of the Belgian Government will not be to stimulate reflation but to regulate it.