However, a weaker euro, that would further improve Europe's trade position, would give rise to stronger calls for protectionism in the United States. For the United States, success of the euro is important because it will help modernize and strengthen the economy of Europe which remains America's most important trading partner. At the same time, the euro's success will require long-term adjustments. The ability of the United States to sustain its large trade deficit position will be constrained by reduced financial inflows, and measures to offset inflationary pressures might ultimately become necessary. Thus, Europe's transformation into a truly unified economic space will inevitably lead to a change in the EU-U.S. relationship in the 21st century.
Economic transformation has security dimensions.
If EMU is a prelude to European political unification and paves the way for the creation of a truly supranational European identity, it can lead to realignment in the distribution of power in the international system as a whole. The resulting changes, which will be gradual and incremental but also inevitable, can influence international security relationships. The development of the EU as a truly unified economic space is occurring even as the U.S.-European political relationship is becoming increasingly disconnected. The dissolution of the USSR ended a period in which a massive and immediate threat to the common interests of the United States and Western Europe forged an enduring bond. Although tensions between the United States and Europe existed, the necessity of their security relationship could not be challenged.