EURO貨의 국제적 지위와 영향

Abstract

According to the Maastricht Treaty, stage 3 of the EMU starts on January 1, 1999. At that point, those participating countries are to fix irrevocably the exchange rates for their countries and replace their domestic currencies with the newly created euro. It is expected that 11-12 countries including France and Germany will participate in this endeavor.

This could imply a big change in the international role of key currencies, their exchange rates and the international monetary system. First of all, the euro will emerge as a potentially serious competitor for the dollar in its role as the international currency based on its vast underlying market, the size of which will be comparable only to the US economy. Particularly important for the determination of the international role of the euro in this respect are the economic size and openness of Europe, the excess foreign reserves of European central banks, the private portfolio rebalancing and the demand pattern for the international currencies by East Asian countries which hold 40% of world foreign reserves. Second, the exchange rate of the euro will be directly affected by the monetary and exchange rate policies of the future European Central Bank. Third, the introduction of the euro will pose seriou squestions for the constitution and management of international organizations to which the member states of the EMU belong because of the changes in the quotas for international financial institutions like the IMF and BIS.

When it comes to the impact of the euro on the Korean economy, the demand for the euro is expected to increase as a trade invoicing or portfolio rebalancing currency. However, diversification or substitution in favor of the euro will be interrupted briefly by the recent currency crisis and the consequent massive borrowing and repayment of the dollar the Korean economy is facing.