The euro: still unloved

Posted By David Bosco Monday, January 29, 2007 - 10:54 AM Share

A new survey shows that deep skepticism about the Euro persists:

[M]ore than half of citizens in countries using the euro say they prefer their former national currency, according to the poll of 5,314 adults in Germany, the UK, France, Spain and Italy, which was conducted between January 10 and January 22. Almost two-thirds of Germans say they preferred their former currency, the D-Mark.

In isolation, it's hard to see that these views matter much. As long as people use the euro, after all, does it really matter whether they love it? But the results appear at a time when the European Central Bank may raise interest rates—always a delicate task. Strong growth in Germany, Europe's largest economy, has convinced the Euro-bankers that some fiscal tightening is essential to prevent inflation. As the FT piece points out, however, the ECB is already under fire in France for stifling growth. And so, the ECB's acute dilemma will soon be on display again: how to make monetary policy for a continent with more than a dozen national economies growing at quite different rates. It makes the Fed's task look simple.

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