Summary:Today′s Europe is one facing a number of changes, most of which are due to the monetary reorganization that created the European Monetary Union (EMU)leaving Europe to deal with a number of challenges and opportunities including a struggling currency, shifting demographics, and a new worldwide perception of Europe′s place in the global economy.
The panelists conducted the session in a tone of cautious optimism. In the last few years, the Euro has lagged behind the U.S. dollar, with a continuous downward zigzag. However, the economy has maintained an upward growth trend with unemployment stabilizing from 1995-1997 at 10.75, then decreasing to 1991 levels since 2000. In fact, as a result of a weak Euro, the European economies have remained strong in a global recession. The world is expecting a recovery from the EMU, though Lee Thomas notes that investors are buying into the Euro, not because of confidence, but as a statement of Europe′s place in the global economy.
Andres Drobny notes that a risk does exist for Europe to become a "junkie for a weak currency" and not mirror the rapid growth of the U.S.
Another problem that Europe faces is immigration. In contrast to the U.S., Europe′s immigrants come in large groups from few countries. This makes it difficult to assimilate with the other naturalized Europeans, as there are the immigrant communities are large enough for newcomers to remain segregated within their own groups.
Additionally, many of these new immigrants come from Arabic countries that have a history of conflict with western states. Recent resurgences of anti-Semitic attacks in Western Europe have intensified these feelings. Traditional European xenophobia intensifies the problem of assimilation, jeopardizing the use of tools to deal with the inevitable problem of immigration.
Thomas stated, half-jokingly, that Europeans want prosperity, but, at the same time, they did not want to interrupt the status quo. The euro was intended to be an evolution of the European fiscal and monetary system, rather than a global financial revolution. There was not a massive influx of American business culture, but a slow trickle. Overall, the EMU has faired well in this global recession, sailing through without a disaster, which is positive, with return on equities higher than the U.S. It is yet too early to determine the ultimate success of the Euro, and the panelists again, remain cautious, yet positive.
