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Europa and John Bull

January 13, 1999



Just weeks into the euro era, the new currency is proving unexpectedly magnetic. Major retailers are pressing European governments to speed introduction of the new coins and bills. They urge 2001 instead of the planned 2002. They worry consumers will feel the euro is a phantom currency, for travelers checks and finance, not the average shopper's purse. Then there's the usual pull of an "in" club. Britain, Sweden, and Denmark - the three holdouts on the euro - hear calls to join sooner. London financial leaders urge an earlier popular referendum, lest Europe's biggest investment hub lose clout. Danish polls show a quick public opinion shift from unfavorable to favorable on joining. Sweden's ruling party eyes ways to speed a popular referendum. If the euro's centripetal pull continues, Europe's new central bank and its currency will likely gain even greater global influence than their fast start this month indicated. But are there downsides to this success story? Two as yet unsolved problems come to mind. One is helping British Euroskeptics feel comfortable about taking another step away from the sceptered isle into continental Europe. A second is the difficulty of taming persistent French and German unemployment problems. Because the perceived incompatability of Europa and John Bull is deep-seated and emotional, economic numbers alone won't persuade objectors. More convincing, perhaps, would be a campaign which points out that even in strongly federal America, the distinct character of individual states and regions has survived for generations. See: Texas, Oregon, Louisiana, Hawaii, Maine. Shakespeare's green and pleasant land could expect at least as much - especially if current efforts to blunt the hubris of Brussels Eurocrats succeed. Euro-phoria won't solve German-French job needs. The common currency will likely bring more business competition and downsizing. Only longer term will this result in creation of nimble new firms and large numbers of new jobs. European governments must aid that process by curbing excessive regulation and taxation.

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