As a long-run competitor and collaborator with the dollar, the euro creates the potential for a bipolar international monetary system, offering unprecedented challenges and opportunities to economic policymakers. This book explores the euro's international role, its record till its fifth year, and its future.

Seminar paper from the year 2007 in the subject Business economics - Economic Policy, grade: 2,7, Friedrich-Alexander University Erlangen-Nuremberg (Lehrstuhl für Auslandswissenschaft), course: Seminar: International Trade, language: English, abstract: The major event of introducing the single currency in 1999 did not have a great effect in daily life because the consumers in all twelve countries were still using their national banknotes and coins in payment transactions. Officially the euro replaced the national currencies, with the national currency units becoming sub-units of the euro but it existed only as scriptural or ‘book‘ money. That meant that first of all especially the world of business and finance began to use the euro in cashless operations. For them the transition happened immediately but on the other side for administrations and business the transition period took longer because they had to change their systems for accounting, pricing and payments over to the euro. To familiarise the people living in the euro-area-countries with the euro, dual pricing on labels was introduced and so the general public recognized the changing.

Whilst the debate on the merits of adopting the euro rage on in the UK, comparatively little attention is paid to the way in which the ECB is managing monetary policy in the euro zone. This analysis describes the success of the first five years of the euro's life. Not only has price stability been maintained, despite some turbulent economic times, but the financial markets appear to be convinced that the ECB will be effective in the long term in maintaining a stable price level. The paper describes the mechanisms that have been used by the ECB to achieve its objectives. The paper, published by the Institute of Economic Affairs, also examines the issues that EU governments must address, particularly the problems of structural rigidities in their economies. The paper concludes that the ECB must not be sidetracked into trying to achieve higher growth and employment - that is only in the power of governments that must adopt liberalising reforms.

Over the first ten years of its existence, the euro has proved to be more than a powerful symbol of collective identity. It has provided price stability to previously inflation-prone countries; it has offered a shelter against currency crises; and it has by and large been conducive to budgetary discipline. The eurozone has attracted five new members in addition to the initial eleven, and many countries in Europe wish to adopt it. The euro has also been successful internationally. Even though research presented in this volume confirms that it has not rivaled the dollar's world currency status, it has certainly become a strong regional currency in Europe and the Mediterranean region. Some countries in the region have de facto adopted it, several peg to it, and many have become at least partially euroized. However, the euro's impressive first decade is likely to be followed by a much more difficult period. The present financial crisis is posing at least two important challenges: real economic adjustment within the euro area and maintenance of fiscal and financial stability without a central government authority capable of taking appropriate financial and fiscal decisions in difficult times. The papers and remarks in this volume demonstrate that the euro has proved to be attractive as a fair weather currency for countries and investors well beyond its borders. But it remains to be seen whether it is equipped to also succeed as a stormy weather currency.

The Future of the Euro is an attempt by political economists to scrutinize the fundamental causes of the euro crisis, determine how it could be fixed, and consider its possible futures. The book makes three interrelated arguments about the euro's problem, experience, and future that stress the primacy of political over economic factors.

This book is the first comprehensive political and economic account of the birth and development of the Euro. Today the Euro is the supranational currency for sixteen European countries and the world's second-largest reserve currency. David Marsh tells the story of the rivalries, intrigues, and deal making that brought about a currency for Europe, and he analyzes the achievements and shortcomings of its first decade of existence. While the Euro represents a remarkable triumph of political will, great pressures are building on the single currency. Drawing on more than 100 interviews with leading figures associated with the Euro, and scores of secret documents from international archives, Marsh underscores the Euro's importance for the global economy, in particular for U.S. and British economic and political agendas. Hidden facts and fresh insights from The Euro --How the legacy of France and Germany's tortuous relations affects the Euro--Why the United Kingdom is unlikely to accept the Euro before 2025--The impact on the Euro of the U.S. credit crisis--How the Euro has rebounded against the aspirations of its founders--How Italy and Spain have massively lost competitiveness--Why radical changes must be adopted to prevent a European upheaval

"Few issues lend themselves better to multi-scenario planning than the future of Europe. Here David Smith has filled a glaring gap. He has done so with breadth of vision, open-mindedness, and an authorative command of this complex subject. It is a combination that makes this thoughtful book a must for business planners and policy makers. It also uniquely appeals to Europhiles and Euro-sceptics alike." —Bill Jamieson, Sunday Telegraph "At a time when Europe’s future is the subject of a grand experiment, this detailed exploration of what the results might be is invaluable. Everyone will find something to agree with — or disagree with — in Eurofutures. Either way it provides an immense amount of food for thought." —Diane Coyle, The Independent