At midnight on New Year’s eve, the euro made its debut as a legal tender and became a tangible reality shared by the inhabitants of 12 countries of Europe. Newspapers across the globe carried the screaming headline: “History is made: The euro arrives “ as ECB board member Eugenio Domingo Solans exuberantly claimed, “We are at an historic moment. We have reached the culmination of European monetary integration; the most decisive step ever taken towards a more united Europe.” Romano Prodi, President of the European Commission shared his optimism and described the changeover as “a great day for Europe.” Jussi Uusivuori, the first in the queue with his ten-year son in Helsinki where hundreds braved biting cold to exchange markka for euros, seemed to sum up the hopes and optimism of the not too well off communities in Europe: “Many Finns feel this finally puts them in the heartland of Europe.”
The need for a common currency by the twelve European countries, whose population approximates 300 million, stems from the urge to give an accelerated surge to their respective economies. Euro’s introduction will have a stabilizing influence in countries where it makes its debut and is expected to strengthen speculations that Europe would lead the way as the world continues its march to multiply wealth and harness resources in the immediate decades ahead. However, not everyone would be inclined to subscribe to this view.
Given her spectacular successes and unrivalled status as the world’s only superpower, it is hard to concede that the present economic reverses suffered by the US could lead to unforeseeable dramatic changes with Europe triumphantly marching on and the US trudging behind as her economic slide gains momentum. Unmistakably, since the middle of the twentieth century, US ascendancy in various fields has been on the rise and her economy has grown from strength to strength in the latter part of the last century. Thanks to sustained Research and Development undertakings and a sizable input in high-tech, an effort that consistently yields results, the US economy has reaped bountiful dividends. Its spin-offs have been multifarious, breeding optimism that the US, or Europe-over-the-waters as some historians called it, would retain its leadership role. That this does not seem to be the immediate prospect, at least on the economic front, is hard to digest.
A TIME magazine study “Who will drive the world economy?” that made headlines sometime back seemed to pose the incisive question: “Is it Europe’s turn to run the world? The prevailing mood at last year’s World Economic Forum meeting in Davos was that the US, once the home of irrational exuberance and dotcom mania, is just so 20th century. Yet the five members of TIME’s Board of Economists, which convened in the Swiss ski resort, were less than unanimous. No one disputed that the US economy is slowing and could even grind towards a recession, though most agreed that a recovery would come …. The hottest debate was over Europe’s ability to isolate itself from the woes of the Atlantic. The Continental consensus these days is that having missed the overwhelming US boom, the now blossoming eastern side of the Atlantic will continue to thrive….”
The report quoted Ernst Moritz Lipp, managing partner of Odewald & Campaignie, a German private-equity manager, who predicted that the time is not far off when Europe replaces the US as the engine of growth. The catalyst precipitating Europe’s ascendancy is technology. “Europe in its innovative drive is where the US was three or four years ago,” says Lipp. The introduction of euro as a common currency is sure to cement better political and economic ties between European countries and would give a fillip to their economic growth. Euro might just precipitate the unexpected change. Thus the speculation ‘Is it Europe’s turn to run the world?’ needs to be seriously probed. It cannot be lightly dismissed. The prospects of Europe’s ascendancy, however remote, are not wholly non-existent.