The future of the euro

In Europe's financial centres this week, the euro has made a suave entry. That by no means assures future success. On the streets, euro-11 citizens are being exhorted by jubilant politicians and glossy brochures to revel in a "new era for Europe." So far, so painless; and so abstract. Since consumers will go on using their national coinage until 2002, the momentous irreversibility of what has just occurred has yet to sink in.

Never in history has a multinational currency union succeeded. The EU has embarked on this unprecedentedly risky experiment with only a shallow, largely passive, consensus. Elites may feel more "European"; but as 2002 nears and people confront the trauma of pulping currencies that form part of their sense of history and community, they may turn more, not less nationalist. In the lush euro-uplands of political rhetoric, lurk serpents of popular resentment ready to bite their masters' heels. It will take many years to find out whether these beasts can be truly tamed.

-- The Times, London