Adopting the world’s newest unified currency, the Euro, is a popular trend for many of Europe’s leading countries, but it has its problems.
Tuesday at the Hinckley Institute of Politics, a panel discussed the future of Europe and the challenge of the Euro.
“The decision to use the Euro is more cultural than political,” said John Francis, political science professor.
The other members of the panel included Assistant Professor of Finance Karl V. Lins, Assistant Professor of Political Science Patti Goff and Adjunct Professor of Political Science Philippos Savvides.
Masterminded by former German Chancellor Helmut Kohl since the Euro’s beginnings in 1999, it has had its share of ups and downs.
“The Euro was supposed to run parallel to the U.S. dollar and was meant to stimulate cross-border commerce,” Lins said.
In actuality, the value of the Euro has dropped 23 percent since 1999, and the dollar remains the central store of wealth, Lins said.
In her opening remarks, Goff presented two challenges that prevent the Euro from being used throughout all of Europe.
The first is the challenge of labor mobility. Since not every country in Europe uses the Euro, trading from one country to another may prove difficult if one of them uses the Euro and the other doesn’t.
Goff said the second challenge facing the Euro has to do with the shift from a centralized government to a new organization run by all the participating countries. This may be a difficult adjustment for major nations such as the United Kingdom.
“The European Union has been described as an ‘unidentified political object,'” Goff said?meaning the transition to a market in which the Euro could be successful is still far down the line.