Beyond the single currency” “

It’s only some ten days since the Euro finally reached the pockets of the citizens of the twelve countries of Euroland and already the first balance-sheets of the changeover are being drawn up. Wim Duisenberg, president of the European Central Bank (ECB) and Romano Prodi, president of the European Commission, are hailing the success of the Euro thanks to the enthusiasm with which the citizens of the new currency have adopted the new currency. But drawbacks are not lacking either. We asked Karl Von Wogau , MEP, President of the economic Commission of the European Parliament up till 1999, and rapporteur on the introduction of the Euro, to review the situation. The introduction of the Euro has taken place: what was the response to the “big bang”? Are the concerns about the respect of the Stability Pact by Germany and Italy well-founded? “Technically, the introduction of the Euro has taken place smoothly: the changeover was prepared in the best possible way by the European Central Bank and by the Ministers of Finance. We may undoubtedly speak of a success. In future it will be very important to concentrate not only on monetary policy but also on the economic policies of the individual member states with a view to giving a basis of stability to the single currency. Without proper coordination between these policies, the fears about the failure of some countries, especially Germany and Italy, to respect the Stability Pact, could indeed turn out to be true”. Do you think that the European Union ought to provide itself with a financial supremo, a “Mister EURO”, as in the case of foreign Policy? “The Union already has its own ‘Mister EURO’, who is President of the ECB, Wim Duisenberg. The real crux of the problem is something else: it’s essential that the Euro has a single voice, also political in nature, in the major international forums. To this end, it would be very important if the European Commissioner for the Economy could participate both in the G8 meetings of Ministers of Finance and in other meetings relating to global economic management”. Fears of price rises, problems for the weaker sections of society. Can one speak of a psychological and cultural price to be paid for the introduction of the single currency? “The Euro has already existed in fact since 1999. Inflation was then very low in the Euro area. Today the inflation rate is running at just over 2%, but it’s far higher in the USA. The ECB and the economic Ministers have taken all the necessary steps to ensure internal price stability; apart from some ‘physiological’ exceptions, I would say that the result has been achieved. As regards the so-called weaker sections, enormous efforts have been made in past years to prevent the introduction of the Euro proving unfavourable to the less privileged. Let me give just one example of this: the new banknotes and coins have been designed in such a way that they are easily recognizable by the blind. I don’t see any particular problem for the poor, since the purchasing power of the Euro is just the same as that of the old currencies. From the Romans onwards, history is full of money exchanges, with a systematic diminution of purchasing power. This will not happen with the Euro. Only a few more weeks will be needed to complete the changeover”. The Euro as the first step of closer integration. Will it be enough as the basis for political union? “It’s beyond doubt that the long-term success of the Euro will be possible only in the context of a political union. At Maastricht the monetary Union was achieved, ignoring the political Union which is still too weak. While awaiting the necessary reforms, what’s important is to make progress in the fields of foreign policy and defence policy which represent the heart of the political union”.