ABSTRACT
The first of January 1999 saw a historic event in the construction of Europe. On that date, eleven of the fifteen member countries of the European Union (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain)2 took three steps that many observers thought they would never take. First, they tied their exchange rates to the value of the euro. Second, they adopted a common currency (the ‘euro’), and finally they gave up national control over monetary and foreign exchange policies.
