1725 Constancian crisis
The 1725 Constancian crisis is an economic and political crisis that engulfed Constancia starting in the year 1725 AN. The crisis, primarily characterized by a national cost-of-living crisis and inflation, marked a significant period in Constancia's history. The situation was exacerbated by a series of government missteps, widespread corruption, and other external factors.
Background
Elections were held for the 14th Imperial Synkletos, which convened on 14.1.1724 AN. Brutus Antipatros was elected Speaker, while Ismail al-Osman was appointed Mesazon, having the support and confidence of the ruling Nationalist & Humanist Party, particularly those dikastis from Raspur.
The economic landscape of Constancia underwent significant changes leading up to the cost-of-living crisis that emerged at the start of 1725 AN. This crisis was primarily fueled by rampant inflation, which economists within Constancia initially dismissed as 'irrational exuberance'. However, external economic experts warned that the inflation was a classic case of an overheated economy, where excessive currency supply was chasing a limited pool of goods and services. This situation was further aggravated by widespread reports of corruption and bribery involving the purchase of political seats and loyalties, leading to a misallocation of resources and economic imbalances.
The tangible impact of this inflation was most acutely felt in the surge of prices, especially for essential commodities like food. The rapid increase in living costs led to widespread social unrest and deepened the cost-of-living crisis. Compounding these issues was the decline in the value of the Constancian stater in foreign exchange markets, signaling a loss of investor confidence. The situation was exacerbated by significant drops in the Constancian Commercial Exchange, reflecting a broader economic instability. This investor skepticism led to increased interest rates, further tightening credit availability and deepening the economic woes of both businesses and consumers.
Government response
Initial government response was to assuage public outrage by firing Zvonko Shani as Minister of Finance, Erast Meginfrid as Minister of International Trade and Industry, and Frederik Adonai as Minister for Budget and Management, with new appointments forthcoming. Hansjörg Monat, Minister for Labor and Employment resigned a few days after this, claiming personal health issues, which some journalists claimed was disgust at government mismanagement of the crisis.
The government likewise went on a public relations offensive, emphasizing the economic benefits to be reaped due to the effectivity of the Treaty of Northbloom on 11.XI.1726 AN, as well as the Treaty between Constancia and Çakaristan, and the effects of the Constancian Development Plan, 1724 AN-1729 AN.
General strike
The worsening economic conditions led to a general strike on 13.VI.1725 AN, initiated by the Road Hauliers Transport Association. They were severely impacted by rising transport and petroleum costs, which drastically reduced their earnings. The strike quickly gained momentum with the support of the Constancian Education Association and the National Nurses League, representing teachers and nurses respectively. The Democratic Alliance joined the movement, advocating for political reforms and local government elections.
The Committee of Euran Salvation labeled the general strike as a politically subversive act against the interests of the Euran Economic Union and the Raspur Pact. This led to the involvement of the Trans-Euran Command, which issued General Order 1 of 1726 AN, imposing military authority across the Imperial State and necessitating government and civil society cooperation with the Imperial Constancian Armed Forces.
General Order 2 of 1726 AN mandated the Euran Economic Union, the Grand Commissariat of Eura and Corum, and the Honourable Company to exercise dictatorial powers (in the words of the order) over the Constancian economy during the period of exception. Regulation 1 of the Tripartite Economic Committee, issued on 17.VI.1726, mandated the freezing of all commodity prices at their present level. 'Market manipulators', meanwhile, were meanwhile to be identified and taken into custody by the State Protection Authority, pending the organisation of public trials intended to assuage the anger of the public.
General Order 3 of 1726 AN meanwhile ordered the mobilisation of first and second reserve personnel in the Home Guard for the purpose of strike breaking actions and for the securing of food and fuel reserves in the Imperial State.
In more general terms, the Committee of Euran Salvation was intensely eager to bring the unexpected surge in inflation under control as swiftly as possible, lest mounting unrest were to imperil ongoing pacification campaigns in the Norasht and Zinjibar regions. In addition to price controls and political repression, the Committee also sought to obtain the speedy dumping of foodstuffs and fuels into the Euran market so as to collapse the inflationary pressures which had begun this crisis. Nouvelle Alexandrie, Natopia, and the Benacian Union, were all approached with proposals to export essential commodities to Euran Economic Union at a heavy discount in return for trade credits and yields from bonds purchased with the nominal value of the cumulative discount in purchases made by public authorities and economic actors under the ultimate control of the Committee of Euran Salvation.
International response
The severity of the crisis in Constancia elicited a significant international response, particularly from neighboring countries and allies, who recognized the potential regional implications of a destabilized Constancia. Notably, Nouvelle Alexandrie, Natopia, and the Benacian Union, three of Constancia's closest allies, played pivotal roles in crafting a rescue package designed to stabilize the country economically and politically with assistance of the Euran Economic Union and the Community of Goldfield.
