Domesticating the Euro

Intereconomics - „We find the litmus test is whether governments gain access to a safe source of funding in a ‘domestic’ currency. Of the list of solutions considered, both Purple...     

欧元的光泽

当今世界,经济的全球化和区域化同时并存并且在飞速发展,以国内生产总值来衡量,世界经济已经形成北美、西欧和东亚三分天下的局面,地区之间的合作不断加强,彼此之间的联系日趋紧密,共同影响着世界经济的发展.欧盟经过40多年的一体化建设,其经济实力已可与美国相匹敌,贸易总量已超过美国,成为当今世界经济格局中强有力的一极,不仅增强了世界经济多极化的发展趋势,也有利于促进世界政治新格局的形成.     

The Euro at 20: A New Deal to Save the Euro

Intereconomics - “In its present set-up, the EMU could be expected to follow its historical predecessor, the Latin Monetary Union, which was founded in 1865 and in effect ended in 1914. Then...     

欧元登场了

欧元来了.在一场空前大规模物流运作后,欧盟地区最终引入了新的单一货币--欧元.     

Zehn Jahre Euro

Ohne Zusammenfassung     

Minimal Conditions for the Survival of the Euro

Most technocrats argue that creating the euro was a way of forcing the pace of political integration, since monetary union is not possible without political union. We disagree and instead put forward four minimal conditions for the survival of the euro. Political integration in Europe has its limits; the trick is to understand when less is more.     

Introduction of the Euro and the Dense Society

The author voices her misgivings over a purely "technical" introduction of the new single currency. The present social, cultural, economic and political crisis of modern Europe is sketched, and the concept of the "dense society" is used to describe an expanding society with restricted mobility, limited vitality and excessive focus on the present. The special relation between society and finance is also amplified. Against this background, it is maintained that there is a need to restore a virtuous link between the business and finance world and society, stressing, among other things, innovative entrepreneurship, investment flexibility, new forms of work, and the creation of collective mutuality. The introduction of the euro must be connected not only in symbolic but also in concrete terms with a resurgence of development, mobility and social inclusion.In addition, the author describes the specific problems with the changeover to the euro that she sees for Italy, a nation where a very positive attitude towards the euro prevails but where there is little knowledge of the mechanisms of the changeover. The specific characteristics of the retail trade as well as the savings and investment patterns may create particular problems for Italy in connection with the changeover.     

Characterising Euro Area Multinationals

This study uses firm‐level data on a large sample of European manufacturing firms to investigate the links between opening up foreign affiliates and firms’ productivity. The analysis is guided by recent theoretical models of international trade with firm heterogeneity. The paper finds that while only a small share of euro area firms locate affiliates abroad, these firms account for over‐proportionally large shares of output, employment and profits in their home countries. They have higher survival rates and their productivity growth is also higher. The strongest contribution is by productivity growth of existing firms with a multinational status rather than entry into the multinational status. Finally, there are performance premia for multinationals with a large number of affiliates abroad relative to those with a small number.     

Preparations for the Euro by U.K. SMEs with Trading Links with the Euro Currency Area

This paper examines euro preparations by U.K. SMEs with trading links with the euro currency area. It suggests, notwithstanding the U.K.'s decision not to join the euro in the first wave, that SMEs with euro area trade links are particularly likely to have had to make some adjustments for the introduction of the euro. The paper assesses this level of preparation and seeks to understand if it is contingent upon the characteristics of the business, its geographic location, its business orientation and the type of trade link (e.g. importer/exporter). The paper finds, contrary to previous research, that business characteristics, geographic location and business orientation are, on the whole, of limited value in explaining euro preparation. What, instead, seems more significant is the type of link with the euro area: importers, exporters and those with subsidiary businesses in the euro area appear more likely to have made preparations for the euro than U.K. SMEs that are part of a euro supply-chain or are a subsidiary of a euro area business.     

The adjustment mechanism in the Euro Area

This paper analyses the adjustment mechanism in the euro area prior to the crisis. Results show that the real exchange rate adjusted to redress cyclical divergences and that after monetary unification, real exchange rate dynamics became less reactive to country-specific shocks but also less persistent. Regulations affecting price and wage nominal flexibility and employment protection play a role in the adjustment mechanism. Indicators of product and labour regulations appear to matter for both the reaction of price competitiveness to cyclical divergences and for the inertia of competitiveness indicators.     

The Euro and the World Monetary system

Stage Three of European Economic and Monetary Union is scheduled to begin on 1st January 1999 at the latest; by 1st July 2002 the euro will probably be the only legal tender in the participating countries. The role of the European Central Bank and the euro in the international monetary system is still very unclear, however. This poses a risk for the intended independence of the ECB.     

Determinants of Inflation Expectations in the Euro Area

Euro area inflation has been rising strongly in the wake of the COVID-19 pandemic, giving rise to concerns that there could be second-round effects, with higher inflation leading to higher inflation expectations, which in turn lead to higher inflation. This could result in more persistent rises in inflation.

     

Reflections on the Euro Area Fiscal Stance

Avoiding the mistakes of the past, when the good times were not used to build buffers, will be crucial to avoid countries again being forced to engage in a pro-cyclical fiscal tightening in the next downturn.     

Thresholds of financial development in the Euro area

We analyse the dynamics of financial development and economic growth in the Euro area as these countries went through considerably higher levels of financial development. Using a balanced panel data of 38 years from 1980 to 2018, we offer new evidence on the finance–growth nexus. We show the presence of non-linearity as there is an inverted U-shaped relationship between finance and growth in the long run. Estimating the thresholds in the finance–growth nexus, we notice a threshold effect at 74%–86% of GDP for domestic credit; 51% of GDP for stock turnover ratio; and 65% of GDP for stock market capitalisation. We notice that exceeding the threshold causes deceleration in economic growth as too much finance results in crowding out effect for productive economic activities. The panel Granger causality test results show that financial development should be associated with optimal growth performance. These findings in the Euro area provide some useful policy implications to the emerging and developing economies in designing their financial development strategies.     

Implications of the introduction of the Euro for the Mediterranean countries

The Mediterranean peripheral countries cannot afford to be passive viewers of the fundamental changes that are taking place in Europe after the introduction of the Euro. The new developments pose formidable challenges and opportunities. It will be argued that no single group of developing countries will be more affected by these changes than the Mediterranean countries given their geographical proximity to the region and their long historical record of extensive and large economic interactions (trade, finance, and migration). This article examines the implications of the introduction of the single currency in Europe on Mediterranean central bank reserves and foreign external liabilities, trade and capital flow, and exchange rate policies. It is shown that since most Mediterranean trade is with the EU, Mediterranean central banks will be necessitated to hold major portions of their foreign exchange reserves in Euros. Also, a Mediterranean currency peg to the Euro, or to a basket of currencies where the Euro is allocated, will be important in reducing financial and trade transaction costs. It will also be hypothesized that Mediterranean foreign debts will eventually have to be converted to Euros. Finally, parallels between this region and the U.S–Caribbean region will be drawn to reinforce the argument that trade and capital dependence will eventually lead to a pegging of the Mediterranean currencies to the Euro. © 2003 Wiley Periodicals, Inc.