European Monetary Union

On Jan. 1, 1999, 11 of the 15 members of the European Union will take a giant stride toward economic integration by adopting a single currency, the euro. Initially, it will be used for non-cash transactions such as stock purchases, but in three years the nations in the new monetary union will begin using euros for all transactions. Supporters of European integration hope that the demise of the mark, the franc and other venerable European currencies will remove a major obstacle to economic unification. Achieving economic integration brings uncertainties and risks, however. The countries involved must cede sovereignty over monetary policy to the new European Central Bank, while the United States must confront a new competitor in the world-trade arena.