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The Euro

The Euro: The Battle for the New Global Currency

Copyright Date: 2009
Published by: Yale University Press
Pages: 352
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  • Book Info
    The Euro
    Book Description:

    This book is the first comprehensive political and economic account of the birth and development of the Euro. Today the Euro is the supranational currency for sixteen European countries and the world's second-largest reserve currency. David Marsh tells the story of the rivalries, intrigues, and deal making that brought about a currency for Europe, and he analyzes the achievements and shortcomings of its first decade of existence.

    While the Euro represents a remarkable triumph of political will, great pressures are building on the single currency. Drawing on more than 100 interviews with leading figures associated with the Euro, and scores of secret documents from international archives, Marsh underscores the Euro's importance for the global economy, in particular for U.S. and British economic and political agendas.

    Hidden facts and fresh insights fromThe Euro:

    --How the legacy of France and Germany's tortuous relations affects the Euro

    --Why the United Kingdom is unlikely to accept the Euro before 2025

    --The impact on the Euro of the U.S. credit crisis

    --How the Euro has rebounded against the aspirations of its founders

    --How Italy and Spain have massively lost competitiveness

    --Why radical changes must be adopted to prevent a European upheaval

    eISBN: 978-0-300-17390-1
    Subjects: Economics, Political Science

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-v)
    (pp. vi-vi)
    (pp. vii-xii)
    David Marsh
    (pp. 1-12)

    The Euro, according to its supporters – and they abound in their millions, within and beyond Europe – is one of the Old Continent’s brightest and grandest success stories. The supranational money at the heart of Economic and Monetary Union (EMU) launched in 1999 has become the second most important international currency after the US dollar – and one day could supersede it. The European single currency, with a unified monetary and interest rate policy across the sixteencountry EMU area, is breaking down barriers between people, companies and markets – a central component of postCold War Europe following the fall...

    (pp. 13-30)

    A currency for Europe is a design long in its pedigree, enrapturing in its endeavour. The dream of a common unit of money to invigorate and unify disparate peoples, and imbue national economies with wealth and dynamism, has sporadically captured attention throughout centuries of political thought. Because European monetary union attempts to fuse a potentially highly unstable combination of politics and economics, realising it has been an elusive aim. But because its accomplishment is believed to bring such rich rewards, the would be builders of the single currency have proved extraordinarily persistent.

    Over the ages, monetary and political union have...

    (pp. 31-67)

    The quarter of a century after the Second World War saw a rebuilding of the European monetary landscape that was as wide-ranging as had been the calamities and disorder of the 1920s and 1930s. At the epicentre was the Federal Republic of Germany, the western rump of a defeated, devastated and dismembered nation, established under the tutelage of America, Britain and France. Bretton Woods brought a special irony. Ultimately, the greatest European beneficiary of the financial concordat emanating from the ravages of war was the country that bore the main responsibility for its outbreak: Germany. Yet in the immediate aftermath...

    (pp. 68-92)

    Helmut Schmidt and Valéry Giscard d’Estaing were self-confident, internationally-renowned finance ministers when – within eleven days of each other – they became leaders of West Germany and France in May 1974.² The new chancellor and president were men who understood money, with all its codes, charms, whims and temptations. During their respective eight- and seven-year periods in office, Schmidt and Giscard elevated Franco-German monetary cooperation – enshrined in the semi-fixed rate European Monetary System that they constructed in 1979 – to a central instrument for balancing the exigencies of politics, economics and history. They faced different, yet interlocking, requirements. The...

    (pp. 93-131)

    The contrasting characters of François Mitterrand and Helmut Kohl, the longest-serving French and German leaders since the 1870s, played front-line roles in a long-running search for European equilibrium. Mitterrand was a man of letters and master of intrigue whose many-hued background and enigmatic personality made him the supreme metaphor for the swirling political currents that drove Europe towards the Euro. Kohl exuded an air of jovial certainty tinged with rumbustious brusqueness. Though he never lost his belief in the long-term goal of German reunification, he was taken aback when the opportunity presented itself in 1989 – and then pushed it...

    (pp. 132-175)

    In 1989 the Cold War ended in a blaze of hope and a crescendo of confusion, providing the spark that lit the way to a European currency. The fall of the Berlin Wall brought the sudden prospect of rapid unification of East and West Germany. The upheaval in East Germany was prompted by shifts in the East–West power balance, above all in the changed political climate between Moscow and Washington. But it also reflected the magnetic pull of the fastgrowing West German economy on the East German population disillusioned by forty years of Communism. Across continental Europe, especially in...

    (pp. 176-205)

    The after-shocks of Maastricht brought a variety of strains and fissures, just when the Europeans should have been celebrating the rebirth of a unified Europe, the arrival of the single market and the blueprint for the single currency. A triumphant wave of western liberal capitalism had crashed on to the beachhead of central and Eastern Europe in 1989–90, tearing away the hold of communism. Yet only three years later the western part of the continent was caught up in the turbulent backwash of its own previous success. This was largely the result of a serious recession in 1993 –...

    (pp. 206-235)

    The single currency brought a radical change of monetary authority across many nations with proud heritages. Under the banner of the Euro gathered the ancient cities that had spawned dynasties, civilisations and empires: Lisbon and Antwerp, Genoa and Paris, Vienna and Amsterdam, Athens and Rome. Some of the currencies that were extinguished, such as the French Franc, the Spanish peseta, the Portuguese escudo, the Dutch guilder, or the Greek drachma, were genuinely antique. Others like the D-Mark, Italian lira, Austrian schilling and the Belgian Franc were relatively modern inventions. All contained the seeds and the spirit of centuries of European...

    (pp. 236-261)

    The reorganisation of Europe’s money has neither healed nor destroyed the continent. The consequences of the single currency have matched neither the greatest hopes of its supporters, nor the gravest fears of its detractors. The stabilisation of currencies and the reduction of European interest rates to German levels brought some powerful benefits. But behind the apparent stability of monetary union linger a number of disadvantages caused by additional sources of rigidity built into the European economic system – handicaps that seemed particularly likely to cause problems at times of crisis.

    In the first eight years of the Euro’s first decade,...

  14. NOTES
    (pp. 262-321)
    (pp. 322-331)
  16. INDEX
    (pp. 332-340)
  17. [Illustrations]
    (pp. None)