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European Affairs
The Euro's Impact on Europe and the United States: Introduction
Most Americans have not given much thought to the euro since it was launched with considerable fanfare by 11 of the European Union's 15 member states at the beginning of 1999. Those who have paid some attention may be forgiven for concluding that the only noteworthy feature of the new currency has been its headlong plunge against the dollar.
But much more has been going on in Europe since economic and monetary union eliminated the possibility of exchange rate changes between the 11 participating countries and transferred control over interest rates to the new European Central Bank in Frankfurt. What is now happening is of direct relevance to Americans, and to the international role of the dollar.
In this special report, Steven Everts of the Centre for European Reform in London, argues that the euro is good news for US-European relations, and that it will help Europe to become a stronger and more valid international partner for the United States - even if the world role of the dollar is now bound to be gradually reduced.
The well-known British commentator, William Keegan, Associate Editor of The Observer newspaper, examines the background to the creation of the ECB and explains why it has a bias toward controlling inflation rather than stimulating economic growth, and Robert D. McTeer, Jr., President of the Federal Reserve Bank of Dallas, offers a special view from the Lone Star State. McTeer admits he never expected the euro to see the light of day, but still wishes it well.