Time passed day by day, and soon it was mid-February of 1940.
The Soviet Union was still struggling on the Finnish front. The Mannerheim Line had long been battered and on the brink of collapse, yet it held until now. According to German intelligence, Soviet casualties had reached 800,000, while Finnish losses were less than 30,000. For a moment, the combat effectiveness of the Soviet Army became a laughingstock worldwide, mocked as a paper tiger that looked good but was useless in battle.
However, no matter how much Stalin raged or slammed his fist on the table to issue death orders, the Soviet Army made no progress.
"What a case of saving face at the cost of suffering," Wilhelm couldn't help but sigh. Even in such a situation, Stalin refused to withdraw his troops or end the war.
But this was understandable; Stalin needed to consolidate his authority. Withdrawing now would mean acknowledging defeat in the war and, by extension, the failure of many of his policies. Once people lost trust in him, it would be much harder to implement his policies.
Stalin would never tolerate failure, so he had no choice but to confront Finland head-on.
This war also allowed Finnish snipers to shine. Simo Häyhä alone killed over 200 Soviet soldiers, and his partner, Tiainen, surpassed 200 as well; other snipers achieved notable successes, making Soviet soldiers dread these snipers, calling them "White Death."
On the British side, after Northern Ireland fell and Ireland was unified, President Douglas Hyde of Ireland announced to the world that they would contribute to the complete destruction of the evil British Empire.
The unification of Ireland effectively blockaded the British mainland, with dense minefields in the surrounding seas preventing British ships from leaving their ports. Even if Britain attempted to clear the mines, their minesweepers were either sunk by new German mines or by German warships patrolling nearby. Moreover, no matter how hard they tried to clear the mines, they couldn't keep up with the rate at which the Germans laid them.
Despite this, Churchill had no intention of surrendering. According to German intelligence estimates, even if these British only ate twice a day, living off bran and thin gruel, they could at most last a year before starvation set in. It was unclear what Churchill was holding out for; perhaps he was insane.
However, Wilhelm didn't want to wait a year for them to starve; as the saying goes, "the longer the night, the more dreams." He continued with his plan to invade the British mainland by the end of February, completely eradicating this European cancer.
Apart from this, there were many good pieces of news, like nearly 500 tons of gold ornaments being excavated from the pyramids in Egypt, the intelligence department secretly bringing Molotov's daughter to Germany, and the Navy's "Tiger Shark" super-submarine entering sea trials, among others.
On this day, Wilhelm invited Pierre Laval, the Prime Minister of Vichy France.
After some pleasantries, both host and guest sat down, and Wilhelm spoke, "I've invited you here today to discuss something."
Prime Minister Laval smiled self-deprecatingly. "Your Highness is too polite. Just tell me what you need my help with."
Since Laval was being so courteous, Wilhelm didn't mince words and got straight to the point. "I want to establish a European Union."
"A European Union?" Laval was taken aback. "Do you mean the 'United States of Europe'?"
Laval was not unfamiliar with the idea of the "United States of Europe" because France had once harbored dreams of a Europe united under French leadership, a dream that traced back to the formidable Napoleon.
In European history, Napoleon can be considered the first to put the "United States of Europe" into practice. The vision of a United States of Europe was the third element of Napoleon's nature, serving as a source of his confidence and energy. His numerous campaigns in Europe were essentially aimed at unifying the European nations to end the calamities of war brought about by the self-interest of the continent's politicians.
However, due to France's limitations in economy, military, and geography, and because war ultimately tests the comprehensive strength of nations, Napoleon's military might was eventually defeated by the enormous collective power of the anti-French coalitions formed by European countries, thus missing the chance to form a "United States of Europe."
Wilhelm nodded. "You could say that. The European Union will have a unified foreign policy, a unified armed force, a unified parliament, uniform laws, a single currency, and a central bank. People, capital, and goods will be able to move freely within the European Union."
Seeing Laval's mouth slightly open in shock, Wilhelm smiled. "In the future, this union will become a single nation, the most powerful country in the world. Its currency will replace the pound as the world's hard currency, and its cities will be the aspiration of outstanding talents worldwide. What do you think? I guess the French people would have no objection; after all, it's the unfulfilled dream of Napoleon from back then."
"..." Laval thought for a moment and then asked, "Is the unified currency you're talking about the German mark?"
"No." Wilhelm shook his head. "We will issue a brand new currency called the 'Euro'. All countries in the European Union will abandon their national currencies in favor of the Euro."
"Will this currency be on the gold standard, linked to the pound?"
Although the foundation of the international gold standard was gold, before WWII, the pound had taken over many functions of international currency. Holders of pounds could exchange them for gold at the Bank of England at any time, and using pounds offered many conveniences over gold. At that time, Britain, with its status as the "world's factory" economically and the "empire on which the sun never sets" politically, along with advantages in trade, shipping, marine insurance, and financial services, made the pound widely used globally and London the world's financial center.
In international trade at the time, most goods were priced in pounds, and 90% of international settlements used pounds. Many central banks held pounds rather than gold in their international reserves. Opening a pound account in London could earn interest, while storing gold incurred storage costs, making holding pounds more advantageous than gold. Thus, some Western economists referred to the pre-WWII international gold standard as the pound standard.
Wilhelm scoffed dismissively. "Prime Minister, are you joking? The British Empire is on its last legs, nearing collapse; how could the new currency have any relation to the pound? Naturally, it will be on the gold standard."
On this matter, Wilhelm didn't need to think much; after all, in the original timeline post-WWII, the U.S. currency, the dollar, was linked to gold, adhering to the gold standard.
At that time, unlike war-torn Europe and Asia, the U.S., far across the North Atlantic, was the only major country whose mainland was untouched by war. Additionally, due to President Roosevelt's New Deal during WWII, which centralized financial control, U.S. capital accumulation was vast. After the war, the U.S. had the largest gold reserves in the world, a stable monetary base, and the dollar was poised to become a universal currency.
The "Bretton Woods Conference" at the end of WWII established the dollar, backed by gold, as the benchmark currency for international trade financing, with other countries' currencies pegged to the dollar at fixed exchange rates with little fluctuation. The goal of the fixed exchange rate system was to maintain the credibility of trading nations and prevent them from falling into long-term trade deficits.
However, people at the time did not anticipate that this would dictate living standards in trading nations, which are measured by many factors beyond exchange rates. For this reason, the Bretton Woods system, conceived under traditional economic wisdom, did not account for the need for cross-border capital flows required for global trade financing.
In 1971, under the pressure of persistent fiscal and trade deficits threatening to deplete U.S. gold reserves, President Nixon abandoned the gold-dollar link (1 ounce of gold = $35), and thereafter, the dollar became an unbacked, non-convertible fiat currency.
In simple terms, since 1971, the dollar's status as a reserve currency has not been based on gold but on the U.S.'s geopolitical strength to enforce pricing key commodities in dollars.