America and the Euro

opinion Essay
3480 words
3480 words

America and the Euro

America’s relationship with Europe has long been the cornerstone of our economic and foreign policy. Today, America’s fortunes remain fundamentally linked with Europe’s. Needless to say, we have a security interest in what happens in Europe, but we also have a vital economic stake. Together, the United States and the EU produce close to half of all goods and services in the world and account for over half of all world trade. While we put great attention on emerging markets throughout the world, one cannot overstate the importance of our commercial relationship. The EU is by far our largest commercial partner. The annual value of U.S. and EU trade exceeds $250 billion. Europe is twice as large a market for American companies as Canada and Japan combined. The U.S. and the EU are also the largest investors in each other’s markets. Europe is also the United States most important partner in supporting the global trading system.

The launch of the Economic and Monetary Union (EMU) is part of a broader process of enlarging and deepening the European union. EU leaders view the EMU as the next historic step in a long process of European integration and essential to ensuring a global role for Europe in the future. This drive toward a unified European currency has long been on the minds of Europeans, ever since a European commission conceived it in 1957.

Economic strength, stability, and vitality in Europe is in the United States national interests. A strong European economy will benefit U.S. exports and American economic interests in general. Though business will have to deal with certain transitions and changes attendant to the adoption of a single currency. The U.S. has a strong interest in Europe’s futur...

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Barber, Lionel. “The Euro’s Progress.” Europe: Magazine of the European Union, April 2000

European Central Bank. Euro Foreign Exchange Reference Rates. March 14, 2001. Available: (March 14, 2001)

European Commission. Convergence Criteria for European Monetary Union (EMU). March 25,1998. Available: (February 26, 2001)

Gros, Daniel. The Euro: Strong economy, weak currency. September 19, 2000. Available: (February 3, 2001)

Guttman, Robert J. “Governor of the Central Bank of Finland Matti Vanhala: Interview” Europe: Magazine of the European Union, April 2000

President Romano Prodi. President’s Welcome. September 1999. Available: (February 26, 2001)

In this essay, the author

  • Explains that the 1992 maastricht treaty made it constitutionally possible to achieve economic and monetary union (emu) and developed the union's inherent political dimension through the new common foreign and security policy.
  • Explains that the european union is a unique, treaty-based, institutional framework that defines and manages economic and political cooperation among its fifteen european member countries.
  • Explains that denmark, scotland, and the uk became full members of the eec in 1973, greece was admitted without complication in 1981, spain and portugal in 1986, austria, finland and sweden united with the member countries in 1995.
  • Explains that denmark, sweden, and the united kingdom have the opportunity to be linked to the euro under the new exchange rate mechanism (erm).
  • Opines that the u.s. must adapt to the introduction of the euro, but its adjustment is minor in comparison with the changes and challenges facing emu member states.
  • Explains that us companies exporting to europe have enormous potential benefits, but there are both advantages and disadvantages for american companies doing business with the euro.
  • Explains ambassador hugo paemen, the european union and the united states in the new millennium.
  • Explains that america's fortunes remain fundamentally linked to europe. the launch of the economic and monetary union (emu) is part of a broader process of european integration.
  • Explains that the european union is the latest stage in a process of integration begun in the 1950's by six countries - france, germany, italy, the netherlands, belgium and luxembourg.
  • Explains the governing system of the european union, which is based on international treaties among sovereign nations rather than a constitution.
  • Explains that the european council adopted the name "euro" in madrid in december 1995. the symbol for the euro is an e with two clearly marked, horizontal parallel lines across it.
  • Explains that a three-stage process was launched in 1990 as eu member states prepared for the single market aimed at boosting cross-border business activity.
  • Explains that the second stage set up the european monetary institute (emi) in frankfurt to pave the way for the ecb. the third stage begins the final transition to full economic
  • Explains that the euro became the single currency for eleven eu member states from january 1, 1999 to december 1, 2001.
  • Explains that the euro will change the financial landscape by eliminating the currency risk that led banks and investors to keep most of their money at home. the large euro zone will integrate the national financial markets, leading to higher efficiency in the allocation of capital in europe.
  • Opines that a transparent market allows everything to be appraised in the single currency, eliminating exchange risk among participating countries.
  • Argues that the benefits of reduced transaction costs, exchange rate instability, and greater price transparency outweigh the losses from introducing the new currency and possible macroeconomic adjustment costs.
  • Analyzes how peter gwin's article entitled americans in euroland emphasizes this advantage.
  • Explains that the single currency will make it easier to do business in europe, but us companies still find many obstacles. the dollar is the world's premier medium of illicit exchange.
  • Explains why the euro's weakness is due to the absence of structural reforms in the u.s.
  • Opines that the eu and the u.s. can provide the leadership needed to address global and regional challenges in an increasingly interdependent world.
  • Explains the european central bank's euro foreign exchange reference rates, which was published on march 14, 2001.
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