No Need to Fear a Strong Euro: Facing the World Economy’s Gordian Knot in Europe

Isbell, Paul (2004) No Need to Fear a Strong Euro: Facing the World Economy’s Gordian Knot in Europe. Elcano Newsletter (1). 6 p.. ISSN 1698-5184

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Abstract

The appreciation of the euro over the last two years –a trend likely to continue into the future, despite a recent slip from US$1.29 to US$1.21– is not only a positive development for the European economy but also a prerequisite for a sustained period of global growth. The world economy cannot recover and begin a renewed cycle of strong sustainable growth until the remaining international macroeconomic imbalances –legacies of the 1990s’ US-driven boom– have been unwound. Only dollar decline and European economic reform can hope to achieve the necessary adjustment. Europe would be well-advised to take advantage of the new window of opportunity for cooperation to resolve the Stability and Growth Pact controversy and to forge ahead with the Lisbon Agenda. While many may be sceptical that this can be rapidly achieved in Europe, it nevertheless remains a better bet than passively expecting the corollary adjustments to be made in the US on fiscal policy or in Asia with respect to currency policy. In the end, if the European project is to deliver on much of its long-awaited promise, the EU must assume its new role as a critical engine of world economic growth.

Item Type: Article
Additional Information: Estudio sólo disponible en inglés
Uncontrolled Keywords: Economía y Comercio Internacional / Europa
Subjects: INTERNATIONAL COOPERATION > INTERNATIONAL RELATIONS > SINGLE EUROPEAN MARKET.
PUBLIC FINANCE; BANKING; INTERNATIONAL MONETARY RELATIONS > CURRENCIES; FINANCING > MONETARY POLICY.
PUBLIC FINANCE; BANKING; INTERNATIONAL MONETARY RELATIONS > INTERNATIONAL MONETARY SYSTEM > EUROPEAN MONETARY SYSTEM.
ECONOMIC CONDITIONS; ECONOMIC RESEARCH; ECONOMIC SYSTEMS > ECONOMIC CONDITIONS > INTERNATIONAL ECONOMY
Divisions: Real Instituto Elcano, RIE
Depositing User: Jorge Horcas Pulido
Date Deposited: 12 Jan 2012 03:09
Last Modified: 12 Jan 2012 03:09
URI: http://biblioteca.ribei.org/id/eprint/604

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