This signals investors and consumers that European governments and the Central Bank intend to produce faster growth. Maastricht rules are bent to allow budget deficits to grow in countries of particularly high unemployment. Consumer spending rises and inflation is held in check - reproducing the recent American experience. Economic growth forecasts are adjusted upward. Manufacturing employment expands.
Imports grow along with the general economy.
The euro begins to rise against the dollar as investment moves back to Europe. European and U.S. authorities cooperate to manage the gradual decline of the U.S. dollar. They intervene in the markets when the two currencies diverge beyond an agreed-upon range. The range is announced publicly. On the dollar side, the U.S. trade deficit improves slowly as dollar declines.