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The international projection of the euro and the international monetary system

par Louis, Jean Victor
Référence The European Union and Global Governance, Routledge Taylor & Francis Group, page (64-86)
Publication Publié, 2009-02

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Résumé :

Born in 1999, the euro has rapidly become an international currency. It has become the second international currency used in all the functions classically attributed to a currency and its role is now more important than that of the legacy currencies. However, the US dollar although in a position of decline, is still the most widely used currency. The euro is a currency without a state. This means that it is in a very specific position with respect to other currencies in a world still mostly designed for and by states. In order to evaluate the way the euro has fitted into the international monetary and financial system, it seems necessary to get a broad view of the components and workings of the main institutions and groupings in charge of monetary and financial stability. Despite the focus on the International Monetary Fund (IMF), one cannot neglect the G7, which has been defined as the screening committee of the IMF, and other entities, like the G20 (which has grown in importance since the Washington Summit of November 15, 2008), the G10 and the Basle institutions (Bank of International Settlements (BIS), Basle Committee for Banking Supervision (BCBS), Financial Stability Forum (FSF)). The European Community Treaty includes provisions concerning the participation and representation of the euro area in international financial institutions. The Lisbon Treaty confirms these provisions and establishes a stable presidency for the Eurogroup, which plays an increasing role in the external representation of the euro area along with the European Central Bank President and the Economic and Monetary Union Commissioner. Practises have developed to coordinate the positions of the member states in the international context. But pragmatism cannot allow for the euro to be effectively represented on an equal footing with the other international currencies. Taking into account the specific features of the IMF, and the ongoing reform of this institution as well as the pressures exercised on the EU, and Europe in general, by its partners, various scenarios are presented and evaluated with regard to the representation of the euro area within the Fund. The question of the inclusion of the euro area is directly connected to a move towards more legitimacy and effectiveness for the Fund. The future of a universal institution for monetary and financial stability is at stake.