The 11 governments in euroland will have to prove that this experiment can work. Last week, initial trading suggested that the launch was proceeding smoothly. A successful euro would be a challenge for Asia to emulate, particularly if the new money erodes the U.S. dollar's dominance in world trade and global reserve holdings. The same issues that the skeptics say will lead to the euro's failure will prevent Asia from integrating. The problems, they reckon, are even greater.
Unification is impossible.
To be sure, the region would have to substantially reduce if not remove controls on the movement of people and capital. Governments would need to liberalize financial sectors even more and be prepared to lose some control over economic policy. There is also national pride to consider. Many Europeans are unhappy that their national currencies will cease to exist on July 1, 2002. A key factor determining the euro's success is how independent the ECB is seen to be.