The impact of the euro

Abstract

The euro is already the second most widely used currency internationally, though considerably behind the dollar. Other factors governing the use of the euro and the dollar are discussed. Statistics on the use of the euro in international trading are quoted. The perception is that the euro has caused price rises but the European Commission stresses that the euro changeover has had little effect, with inflation increasing by only 2.4% from 2001. 40 other countries or territories either use the euro or have their exchange rates pegged to it apart from the 12 countries using it. The substance of the Growth and Stability pact is quoted, with Portugal already having breached the 3% deficit ceiling and difficulties in Germany and France. The impact of the ten new applicant countries to the EU is discussed with the situation in Denmark, Sweden and the UK where the euro has not been adopted. While businesses and countries are positive, citizens are very much less so.