into a serious rival to the dollar as a reserve currency for central banks, an invoicing currency for importers and exporters, and a financial asset for international investors. Data problems for United States corporations and the European branches of multi-nationals will be affected. Organizations whose software handles currencies, cash, and exchange rates will need modification. Also, governmental software that deals with imports, exports and international taxation will require modification. Expenses will appear in the form of initial software repairs, database repairs, hardware upgrades, legal damages, chip replacement, post event damages and recovery.EURO VS. DOLLARThe question remains, Why is the euro so weak when the fundamentals are so strong? One answer, of course, is that the U.S. fundamentals are even stronger. But a strong U.S. economy cannot explain everything. The euros weakness is due mainly to the absence of structural reforms. Matti Vanhala, a member of the ECB from Finland states, it is true that there are so many structural rigidities in the European markets, in the national markets, that is to say, in the labor markets, and in the product markets. Even if we do not clearly understand the reasons, however, should we care about the weak euro and structural reform? The fall in the external value of the euro has a clear cost in that it pushes up prices. At the same time, the fall in the euro has a clear benefit because it stimulates exports, growth and thus employment. The European Central Bank on March 14, 2001, appraised the euro at 0.9182 to the US dollar.So why is the euro so weak when the fundamentals are so strong? In answering this question a major contributor is the strong U.S. economy. The fundamentals of the U.S. are stronger and have had more time to work out the kinks. Once the U.S. economy weakens, the euro will begin to strengthen. A stock-market bubble and an enormous, consumption-driven trade deficit ca...
