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75 Foreign Aff. 110 (1996)
Euro Fantasies

handle is hein.journals/fora75 and id is 850 raw text is: Euro Fantasies Rudi Dornbuscb COMMON CURRENCY AS PANACEA FOR NEARLY 50 years, Europe has been on a course of ever-widening and -deepening integration. For just as long, Germany has been build- ing a reputation as the global champion of hard money to which the deutsche mark stands as its monument. The proposed monetary union to create a common currency in Europe joins these two strands: Europe gets German monetary integrity, and Germany blends into Europe. The Maastricht Treaty, concluded in December 1991, is the pre- nuptial agreement for this marriage. However, on the way to union doubts loom larger than joy. Still in question are the benefits to be derived, the suitability of the partners, and relations with outside parties. These questions are particularly acrimonious because the tight timetable (see p. 112) for converting to a common currency de- stroys illusions, as does Europe's poor economic performance. Europe has 18 million unemployed, and no one knows what to do with them. German Chancellor Helmut Kohl, German industry, and German banks all agree that the common currency, provided under the European Monetary Union (EMU) is a must. Promoters of social union are equally eager; they see integration as a way to ameliorate an eco- nomic system that they regard as having too much competition and too little social justice. Those who question the drive toward a common European cur- rency include monetary hawks, that is, most of Germany's popula- tion and its central Bundesbank; excluded bystanders, such as Central European countries; and benevolent spectators in the United States. RUDI DORNBUSCH is Ford Professor of Economics and International Management at the Massachusetts Institute of Technology. [110]

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