The EURO: A Success against the Odds?

The move to monetary union has been criticized by many economists and the weak performance of the euro on the foreign exchange markets between 1999 and 2001 has tended to reinforce these doubts. Yet in many respects the introduction of the euro has been a success, even though the EMU policy framework remains to be completed. This paper looks at the introduction of the euro in the light of expectations about what would happen and appraises the external performance of the single currency. It then discusses the EMU policy framework and how it might evolve before offering a verdict on the euro so far.