The euro hits the big time. International role of the euro

Since 1999 the euro has strongly gained in importance as an international trade, investment and reserve currency. There are four factors relevant for a rise in the international use of the euro as reserve currency by 2010: the dollar exchange rate, changes in exchange rate policy, rising investment requirements of central banks and increasing focus on yield. The euro will be the undisputed No. 2 after the dollar. All in all a bipolar international reserve system is likely to stimulate economic and fiscal policy discipline on both sides of the Atlantic. However, the euro area must solve the issue of speaking with one voice in order to increase its clout in the international arena.