ABSTRACT
The euro came with a heavy load. One of the many “bags” was lled with the expectation that the euro would foster or even create the missing European identity that is seen as essential for the further development of the European project (Hübner 2005). A next bag was lled with the hope that the new currency could become a competitor to the US dollar and fulll the whole range of the functions of money on a global scale (Campanella 2006; Hau, Killeen and Moore 2002). A further bag was lled with skepticism about the sustainability of the new money fuelled by the fact that the eurozone was not even close of fullling the criteria of an optimum currency area (Feldstein 2000). A majority of university-based German economists, for example, were arguing that the euro would undermine the “ination-ghting culture” established by the German central bank and being Europeanized via the mechanisms of the European Monetary System (EMS), (see Schroeder 2003). And then was the argument that the transfer of monetary policy to a single European Central Bank in combination with the ceiling of scal policy due to the regulations of the Stability and Growth Pact would destroy any chance for an optimal policy mix (Arestis et al. 2002).
