Euro Debut Raises Question on European Unity

EU leaders predictably cheered the long-awaited euro.

"A radical change in the history of Europe," said European Commission, President Romano Prodi. "The euro has made Europe ... more united.

"After a century of crises, wars and hesitations," said French President Jacques Chirac, "our continent is now affirming its identity and its strength ..."

For German Finance Minister, Hans Eichel, the biggest monetary conversion in history was "a new step in the development of European Union, a good decision ... for the future."

But from the outside looking in, European Minister, Peter Hain of Britain, which along with Sweden and Denmark has not yet embraced the euro, cautioned his countrymen that the new currency "will affect Britain ... in or out ..."

His country's press was far more critical. The Guardian called the euro's launch "a highly ambitious and well-prepared leap in the dark."

The Independent scoffed that 12 countries, in relinquishing their national currencies, had "given up part of their identity ... their sovereignty ...their ability to control their own economic and political destiny."

Money aside, the EU this year faces the task of making good on a goal set out at the Laeken summit in the closing weeks of Belgium's rotating Presidency: Wrapping up accession negotiations with as many as 10 candidate countries. That would set the stage for a "big bang" enlargement of the EU into Eastern Europe and the Mediterranean by 2004, which in turn bodes new problems of governing a union nearly double in size.

A constitutional convention, a blue-ribbon panel named at Laeken and headed by former French President, Valery Giscard d'Estaing, convenes in March to ponder that, and opine on whether the time has come for a more federalist Europe. But in the nearer future the economy tops a litany of EU headaches, with recent warnings from European Central Bank President, Wim Duisenberg that economic growth is far lower than expected, economic policies are strained and governments face major deficit problems.

"This puts the European macro-economic framework to a real test for the first time," he said last month.

The Organisation for Economic Cooperation and Development (OECD) puts first quarter euro-zone growth at a meager 0.1 per cent, 1.3 per cent over 12 months, and that on top of an 8.4 per cent unemployment rate.

The March 2000 Lisbon summit did not have those figures when it optimistically predicted EU could overtake the United States and Japan to become the world's most competitive knowledge-based economy by 2010.

Foreign policy and defence also figure high on the EU worry list. The Laeken summit declared the EU's fledgling rapid reaction defence force officially operational for limited, non-combat operations. But internal bickering blocked an ancillary accord with NATO for the strategic support vital for long-range, long-term peace-keeping missions.

After past-year success, in conjunction with NATO, in staving off a new Balkan war in Macedonia, the EU has its eye on a more aggressive peace-making role in the Middle East. Foreign policy chief, Javier Solana will be pursuing, perhaps stepping up, his shuttle diplomacy in efforts to get Israelis and Palestinians to quit killing and start talking.

KEYWORD: Nigeria