Europe’s new single currency represents the consolidation and culmination of European economic integration, a process launched more than a decade ago. The most important economic event since the adoption of flexible exchange rates in the early 1970s, the introduction of the Euro as legal tender in day-to-day transactions in all participating member states has profound implications for Europe internally and for the international community as a whole. While some believe that the various national cultures have not been affected by the Euro, others perceive the common currency as a threat to cultural diversity within the European Union.

This session will explore both the internal and the external dimensions of the euro system following the final transition to full Economic and Monetary Union. Participants will discuss the internal economic, social, political, and psychological ramifications of the Euro, including issues such as the costs and benefits for companies, investors and consumers, confidence in the European market, impacts on political integration, and cultural attitudes towards a common currency and a European identity. The session will then turn to the impact of the Euro outside Europe. Discussions will focus on the Euro’s short and longer-term impact on international financial markets, on currency exchange mechanisms, and on global business, trade, and investment trends. Does the Euro have the potential to compete with the US dollar and the Yen as a leading reserve, transaction, and anchor currency, and, if so, what implications does this have for the rest of the world?