one accounts for 20% of world exports against 16% for the United States and 10% for Japan.3 When imports are worked into the equation the United States holds 19% compared to 16% of the EMU and 7% of Japan.3 Just by these figures the EMU is not just our silent friends across the Atlantic. In order for the Euro to become an international currency strength and stability of the Euro will have to be of essence. Inflation in the area remains low and government deficit are expected to decrease further under the provisions of the Stability and Growth pact.3 America’s net external balance, amounts owed overseas, continues to run large deficits while Europe has a roughly balanced international credit position and runs surpluses in its international accounts.3 (See graphs 1-3 below) Graph 1 Graph 2Graph 3 (Graphs copied from AMUE Euro Newsletter No. 33: June 1998)The Euro financial markets will not only be larger than the current national European markets but also more diversified.3 Compared with the United States and Japan, the weight of equity and debt securities markets is lower and the relative importance of banking is far greater.3 With the implementation of the Euro a new equalization will be created within the global economy. In order for the Euro to become an international currency it will have to become strong and stable. Only these attributes will allow the trust of the global market to vest in the Euro. The stability and strength will have to come from the erouzone and its market, proving the stability of this newfound union.With the widespread use of the American dollar as an international currency and for holding reserves, it is unlikely that the Euro will replace it as the new international currency anytime soon. Europe does not have a centralized tax system to coincide wit the Euro so it may not be so well suited for a single currency union. Maybe in the future as Europe becomes increasingly integrated will wi...
