n only sustain the American economy for so long. When the bubble bursts, the dollar's value will fall, and the euro will return to a more realistic level. The euros depreciation over the past two years occurred for a number of reasons, including more attractive investment opportunities in the U.S., more rapid pace of U.S. productivity growth, and higher U.S. interest rates.Structural reform through the European Central Bank (ECB) held interest rates relatively low in a bid to spur growth in economies plagued by persistently high unemployment and lackluster productivity gains. However this ended up working against Europe and the dollar's value climbed steadily. CONCLUSIONThe political and economic ties between Europe and the United States have been strengthened by over 40 years of close cooperation toward common goals. The EU is an entity that the US increasingly turns to as a partner to share the burdens of world leadership. EU-US relations have thus intensified in recent years. This is partly due to the emergence of the EU itself as a more significant global actor economically and politically. The intensified relationship is aimed at more effective cooperation and leadership in areas ranging from trade liberalization to security and humanitarian assistance. Together, the EU and the U.S. can provide the leadership needed to address many global and regional challenges in an increasingly interdependent world. The implications of the euro will be huge for the U.S. The euro's principle objectives are to eliminate exchange risk, facilitate efficiency improvements, encourage price transparency and lower operating costs in order to create a stronger competitive position for European companies. If U.S. companies can continue their relationships with European companies, we will be able to experience many of the benefits discussed earlier. However, It also gives other countries great incentives to intensify relations with EU countries. Many othe...
