The EU and the US - economic and trade indicators
 
European Union
United States
Population (million)
374
268
Area (1000 km2)
3231
9372
Population Density (inhabitants per km2)
115
29
GDP (billion ECU, 1997)
7078
6062
GDP per capita (ECU, 1997)
18925
22470
Merchandise trade (billion ECU, 1997)    
          Exports
720.4
599
          Imports
670.5
773.5
          Balance
49.9
-174.5
          Exports as share of total world exports
19.4%
16.3%
          Imports as share of total world imports
17.3%
20.5%

(Source: European Union - United States Relations, European Commission)

 
 
Bilateral EU - US trade (billion ECU)
 
1993
1994
1995
1996
EU exports to the US
153.5
168.5
164.3
177.8
US exports to the EU
147.8
159.2
162.2
174.9
         
US Trade Balance
-5.7
-9.3
-2.1
-2.9
(Source: European Union - United States Relations, European Commission)

 
The euro started life at a high level on 4 January 1999, the first day of trading in the new currency.

As the graph below illustrates, the euro declined in value against the dollar on a fairly steady basis throughout the first five months of trading. However, numerous commentators have stressed that the strength of the euro vis-a-vis the dollar can only be determined in the long-term. 

In addition to the relative performance of member states' economies, key determinants of the euro's strength include:

  • The ability of the ECB to maintain price stability
  • The willingness of the Member States to refrain from political interference in the operations of the ECB
  • The relative success or failure of the ECB in pursuing an optimum European monetary policy

 
 
(Source: De Nederlandsche Bank)

 
 
One thing does look fairly certain. If the euro is to achieve a similar status to the dollar in international finance, it will only do so after a long period of time.

The replacement of the pound sterling with the dollar as the primary international currency (earlier this century) took place over several decades. The pound remained the primary international currency long after US economic performance had outstripped that of the UK.

In addition, the US economy is likely to decline relative to the EU, as the UK economy did relative to the US earlier this century. Accordingly, if the euro is to ascend to a par with the dollar in international finance it will be a very long-term development. The dollar is likely to remain the primary international currency for many years to come.

____________________________
Part II. EMU [1] [2] [3] [4] [5] [6] [7] [8] [9] [10]