As a stable currency used by an economy nearly as large as that of the US, the euro will be widely used in global financial markets as well as in commercial transactions. This already ensures depth, liquidity and lower operational costs for financial markets. It will stabilise our business environment with respect to trade and productive investment with the rest of the world. The role of the euro will develop rapidly if European financial markets are well-organised and become a competitive alternative to American markets. This is in the interest of public authorities' management of public debt, and of European businesses in the medium term.
Many economists forecast a medium-term appreciation of the euro to the dollar.
This could induce a strong volatility of the euro exchange rate due to large portfolio shifts into euro. Also, fundamental equilibrium exchange rates depend on policies with respect to internal demand and employment and to current account balances. Under these circumstances benign neglect would become malign for both Europe and America. On the other hand we all know that exchange rate values are not decided by politicians but by the markets. So we believe that solutions may lie in a closer cooperation between monetary and economic authorities, and the transparency of the messages which they send to these markets.