The Euro: Who Wins? Who Loses?

Abstract

(EMU) is the result of 25 years of political battles among and within the continent's nations. Several times-most notably in the early 1980s and again in the early 1990s-the European Union (EU) nearly tore itself apart as it attempted to stabilize the fluctuations of the European countries' different currencies and move toward a single currency. In the end, supporters of a common currency won. In January 1999, 11 European countries will adopt the euro. For three years, they will use the common currency instead of their existing national currencies for large-scale trade and payments. Then, in 2002, euro coins and notes will take the place of national currencies in everyday circulation-that is, in the wallets and minds of Europeans. With the end of the battle over a common currency, Europeans have a more momentous, and more contentious, task before them: to agree on a common monetary policy for Europe's disparate countries, regions, and groups and to manage the political clashes that this process of agreement will unleash. The struggle for control of Europe's most important tool for economic policy pits powerful conflicting interests against one another. And these skirmishes are likely to have substantial effects on the European economy, and on the course of European integration in general.

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