The Birth of the Euro: How Will It Affect the World Economy?

The historic advent of the European Monetary Union marks the first time since the Roman Empire that a large part of Europe will have the same currency. The birth of the euro on January 1 and the concurrent rise of what has come to be called euroland, with a population larger than the U.S., raises far-reaching policy questions:

• Will the euro challenge the international role of the dollar as the world’s reserve currency
• How will trade within the 11 countries and with other nations be affected?
• Will the exchange rate of the euro appreciate, depreciate, or remain stable against the dollar, yen, and other currencies?
• How will euroland, without a single government, handle an international financial crisis and relations with other countries and international institutions such as the IMF?
• What impact will the euro have on global securities markets?

To answer these and other questions, Brookings will host a briefing with Robert Solomon, Guest Scholar and author of a new Policy Brief, International Effects of the Euro. Solomon is a former senior official at the Federal Reserve Board who directed its Division of International Finance.