외교안보연구소 발간자료

Coping with the Euro: Assessments and Prospects

Coping with the Euro: Assessments and Prospects

Coping with the Euro: Assessments and Prospects

대한민국

미국

Coping with the Euro : Assessments and Prospects

Lee Jae-Seung
Professor, IFANS

Abstract
Despite rosy prospects at the time of its inauguration, the euro has generally performed poorly against the dollar. The euro’s weakness derived chiefly from the following four factors: capital outflows resulting from the gap between the US and the eurozone’s growth and interest rates; pressures from rising prices; structural difficulties arising from aggregating the divergent economic situations under a single monetary policy and the European Central Bank’s passive response to the fallout; and a slowdown of the German economy. The weak euro, however, has contributed to boosting euro members’ exports and rejuvenating their economies.
   The achievement of the euro, first of all, can be found in the smooth introduction and operation of a single currency. The euro also merits a positive assessment for enhancing economic efficiency — by eliminating exchange rate fluctuations — and strengthening competitiveness in the eurozone. In particular, the launching of the euro brought the expansion and deepening of financial markets within the eurozone, thereby strengthening the euro’s status as an international investment currency. 
   The success of the euro will depend on both internal and external elements: economic recovery within the eurozone and the fluctuations of the dollar. The Korean government and firms must sharpen their competitive edge against European firms (which have gained momentum with the weakening of the euro), and establish operational plans commensurate with the fluctuations of the euro. Also, as euro members are engaged in multifaceted endeavors to establish confidence in the euro as an international anchor currency, it is imperative that we, as part of our diplomacy vis-à-vis Europe, map out measures for the broader circulation of the euro.

Past Publications

오럴히스토리총서

유럽중앙은행

유럽

Euro

Professor

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Lee Jae-Seung

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ENG