Rashish

Rebuttal to Argument 2:

By Peter S. Rashish

Professor Jonung points to several challenges that face the European Union in the age of the euro. The most daunting one he describes relates to the capacity of the EU to manage the lack of a "common European business cycle," and the fact that Europe is not an optimal currency area.

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Argument 1:

By Peter S. Rashish

The January 1 launch of the euro is the boldest move to integrate Europe's fractious nations since the Common Market began in 1957. It is also the biggest shift in the international monetary landscape since the dollar sprang loose from gold in 1971. But perhaps the most significant aspect of Europe's move to a new currency is what it has in store for the continent's economy: lower prices, falling interest rates, vibrant financial markets and job creation. This mini-boom across the Atlantic is welcome news in today's battered global economy.

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Argument 2:

By Lars Jonung

On January 1, the exchange rates of the 11 member countries of the European Monetary Union, the EMU, were locked once and for all to the euro, the currency of the EMU. In short, 11 currencies were replaced by one currency. This was rightly hailed as a path-breaking event in the history of Europe.

Presently the euro is greeted with enthusiasm and optimism. However, there are reasons to be more cautious concerning the future of the euro. There are benefits and costs involved with the establishment of the euro, as the case is with any economic reform. The costs or the risks are not obvious for the moment. They will be revealed in the long run.

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