At the beginning of 1999, exchange rates of countries entering the monetary union were fixed against the euro, governments began issuing their debt in Euros, and the euro became the new unit of account for electronic and checking transactions. In early 2002, Euros began circulating as media of exchange in traditional currencies were withdrawn from circulation in each country, and the transaction was completed.
When we look back in 20 years, will the move to the single currency be considered a success？Optimists believe that a single currency will
(1) Eliminate the transactions costs associated with exchanging different currencies.
(2) Promote integration of the various European economics
(3) Enhance efficiency by inducing countries to institute reforms removing anti-competitive rigidities in labor markets and other areas. These reforms will move the nations further toward free-markets capitalism. European political clout in world affairs may increase, and the euro may come to raval dollar as premier currency in world markets.
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