Mgr. Alejandro García Chaparro
Ekonomická univerzita v Bratislave
The international role of the Euro
This paper analyses the main factors that determine the performance of the euro as an international currency. The economic elements are explained in terms of trade participation, the degree of openness, population, and the geographical scope of the EU compared to the United States. Also, the development of the European financial markets contributes to understanding the role of the euro in the International Financial System; how the euro has influenced the integration process of financial markets in Europe, and what remains to be done regarding financial integration to enhance the position of the euro. The political analysis is focused on the performance of the Eurosystem and the European Central Bank, as well as in the advantages that political integration could bring to the euro. Attention is paid to the process of decision-making in determining both monetary and fiscal policies inside and outside the EU, the institutions in charge, the external representation of the EMU, and how all those elements affect the euro as an international currency. Chapter three concludes with an analysis of the political power of the euro and the challenges that it represents for the EU members in the short term and the foreseeable future.