The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Euro awaits single financial market

Three years after European monetary union, euro notes and coins enter circulation next month. Some observers predict a mild boost for the currency. But will fresh impetus also be lent to Brussels’ initiative to build a single European market in financial services to complete the picture? This project has been caught up in a constitutional trial of strength as the Strasbourg-based parliament asserts itself. Alexandre Lamfalussy, an architect of the project, hopes the euro’s arrival will focus attention on resolving the dispute about who should agree the principles and who the detail.

The introduction of euro notes and coins on January 1 marks the point of no return for the bold European single currency project. There's no way to untangle the monetary knot once the old currencies have been destroyed. That alone means the event will be of huge symbolic importance. China has recently bought euros for its vast reserves. And the prevailing view is that the euro's external value may about to undergo a modest rise, reversing the gentle downward drift prompted by a concern that something serious is bound to go wrong when Deutschmarks, francs and other national currencies are finally scrapped. At last, the materialization of the currency will wash away worries about its durability and boost flagging popular support for it, say the optimists, who count among their number some of the eurozone's central bankers.

Wilting confidence among both business and consumers has been one of the most important failures of the exercise to date. Survey after survey has found respondents unimpressed - from Ireland to Austria - matching the underwhelmed reaction of foreign-exchange markets since the launch three years ago.

Still, the euro's decline against the dollar has hardly been anything out of the historical ordinary.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree