The European currency has risen by 45% against the dollar in the last two years. The effects of this flux in the currencies has caused division amongst the experts: some say that the euro is too strong and is threatening growth; others believe that the effect had by "the strong euro" might also be beneficial for competitiveness.

It is within this context that François Dutaux-Lombard examines the single currency and its future; he has published "The Euro Today", the 20th Note by the Robert Schuman Foundation.

At the start of his essay the author explains how the euro came to be. He talks about its beginnings and then the major stages that influenced its creation, from the Rome Treaty in 1957 to 1st January 1999. He points particularly to the successes in the launch of the single currency, common to 12 States and involving 300 million inhabitants; simultaneously he mentions the failure of the Brussels Summit in December 2003.

After this review the author puts forward an assessment of our new currency. The first observation; the euro succeeded in effacing the previous national currencies and asserted itself as the successor to the strongest of European tender. Although the euro cannot yet match the dollar - it only represents 13% of transactions worldwide - it has the capacity to progress. The balancing between the greenback and the single currency is inevitable since no world player will take the risk of over investing in one currency only. The euro is the only alternative in the face of the dollar. The author also points out that since 1st January 2002 the euro is the currency of twelve States whose population is greater than that of the USA.

Other advantages of our single currency: within the context of globalisation it accelerates the vital adaptation by European companies to the modernisation of exchange; in addition to this it protects Europe from most crises.

François Dutaux-Lombard draws up an economic panorama of the Euro Zone 2004. In his hypotheses he puts forward his forecast: limited growth, inflation held under the 2% mark, a slight decrease in the deficit (0,1 point), interest rates that continue to be low. He then quotes the three major economic factors that will typify 2004 :

Economic recovery;

The moderation of inflation, the ECB will fulfil its mandate comprising a supportive factor in the buying power of economic agents;

A slow reduction in public deficits.

A major problem remains however: that is the growth rate in Europe in the future; it has only been 1.9% over the last decade and unless there are vital reforms its increase will remain below 2% per year ie 1.25 points below that of the USA.

Apart from the economic results that can still be improved upon the euro's major success lies in the idea the Europeans have of it themselves; a majority of them have adopted it over the last two years and most see its launch as being synonymous to a rise in prices and that the change over was undertaken to the detriment of the consumer.

Just as criticism of the present monetary policy is increasing this publication should highlight detailed reference points in positioning the euro on the international economic scene as well as providing a insight into its role in any future monetary policy.