The Euro at Ten: the Next Global Currency ?
by Jean Pisani-Ferry and Adam S. Posen
July 2009 • 252 pp.
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The euro is now in its tenth year of usage, successfully delivering all the functions of a currency to those European citizens using it, and providing price stability to the euro area. The monetary union and its central bank are in the process of passing the test of a major financial crisis, and have held well so far. In spite of market commentaries and spreads contemplating the euro area’s break-up, one result of the crisis has been that there are more countries wanting to join than before, not less.
Given its success to date, however, the euro could be more than an anchor for some participating countries and an aspiration for others. At a time when voices in China and other emerging countries advocate a multipolar monetary regime, the euro could become a currency for all of Europe, or even a global currency. At a time when investors wonder about fiscal sustainability and the US and ponder the risks of monetisation, it could represent a partial alternative to the US dollar as a store of value. The papers in this volume address this issue of the euro’s impact on the international monetary system so far, and its potential role beyond the euro area over the next decade.