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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
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.


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