The tenth anniversary of the EUR passed by virtually unnoticed as the financial crisis and the attempts to ward of recession grabbed all the attention.

At ten years old what are the current characteristics of the EUR? Will it ever prevail against the USD? Could it eventually replace the USD to become the currency of reference as originally envisaged in the early days?

Maybe, with a rate of interest higher than that of the U.S. and if the member states are able to agree upon a coordinated economic policy, the euro zone could move beyond the current crisis very quickly. Then, from a position of strength, impose itself on the world stage.

Certainly the first parameter is already in place. Mr. Trichet has ruled out the possibility of a 0% interest rate for the euro zone such as currently exists in the U.S. and Japan. But – and this is a huge but – at this stage there is no coordination of economic policies in Europe.

It is unrealistic to plan European wide reflationary measures without taking into account national economic structures. Yet without a unified European economic approach the EUR will remain a shadowy figure, palely loitering in the shadow of the USD. The euro zone at the beginning of 2009 is like an empty shell in which national interests predominate to protect local consumers but which has failed to develop into a genuine political and economical European entity.

In fact, it is the lack of credibility of the euro, even before taking into account the difficulties predicted in the recent OECD report, which prevents the euro imposing itself when compared with the USD. The shortcomings of the euro are clear on the forex market and to traders who, although aware that the U.S.is in a bad way at the moment, are still confident in the dollar as the most durable currency. Some people may be predicting a crash for the USD – but maybe they should revise their prediction.

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