Here comes the euro
Pfaff, Willima
OF SEVERAL MINDS WILLIAM PFAFF HERE COKES THE EURO New challenger to the dollar Hhe arrival of a common European currency is a watershed in the relationship of the United States to the new...
...For the first time in postwar history, vital and "sovereign" interests of the United States and Western Europe will become engaged in what game-theorists describe as "zero-sum" competition...
...It is "zero-sum" because the gain of one will be the loss of the other...
...The euro defies that assumption...
...The European Central Bank will set its own interest rate for an economy that is nearly as large as America's, and is a more important trading power...
...Washington, and most Europeans, have seen European monetary union as a step taken in the context of Atlantic cooperation, which has benefited both sides for five decades...
...OF SEVERAL MINDS WILLIAM PFAFF HERE COKES THE EURO New challenger to the dollar Hhe arrival of a common European currency is a watershed in the relationship of the United States to the new Europe...
...The single currency cannot help but pose a financial and economic challenge to Washington, and that eventually will take on a political weight which neither side now wishes to contemplate...
...This misses the point...
...Both sides are accustomed to the "game" which has prevailed since the Marshall Plan and Europe's reconstruction, in which coalition and economic cooperation profited both sides...
...Washington has imagined no serious challenge to American power until the distant future...
...Since 1989 the United States has been, in economic and military terms, the most powerful state in the world...
...It promises to be the most important event for the United States since communism collapsed...
...Europe's Commonweal 7 January 15,1999...
...The arrival of European monetary union changes the game...
...Europe is disregarded as politically divided, its economy overregulated and un-dynamic, historically "finished...
...It is the most important event for European integration since the Treaties of Rome in 1957...
...Then China, or perhaps a recovered Russia, might test the United States...
...The world economic agenda will no longer automatically be set by the United States, through the Federal Reserve's power to set the key global interest rate...
Vol. 126 • January 1999 • No. 1
