Business Briefs

International Currency Competition:
Euro vs. US Dollar

The 1999 creation of the Economic and Monetary Union (EMU) within the EU was judged by many as the most important transformation of the international monetary system since the breakdown of “Bretton Woods” in the early 1970s. Nevertheless, the introduction of the euro as a single European currency did not create apprehension in the United States, and even less was American anxiety about how the euro would impact the US dollar. Now, ten years down the road, the US has slowly but surely become more aware of the possible challenges the European currency poses to the US dollar, particularly in a time of economic instability.

This brief focuses on this euro-dollar international currency competition. It reflects upon the (European) expectations at the start of the EMU project, looks at its real performance across a decade of European and global growth, as well as during the current economic crisis. By analyzing this performance, it also touches upon the question of whether the European single currency has influenced transatlantic relations.

  • Expectations at the Start of EMU
  • Performance, a Decade Later
  • Performance within the Eurozone
  • Performance Outside of the Eurozone
  • Explaining the Divergence between Expectations and Real Performance
  • The Economic Crisis as a Revelation
  • Conclusion


UNC Chapel Hill: EU Center of Excellence (logo)