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A strong currency may be a central banker's dream, but it can be a nightmare for companies. If they export to countries with weakening currencies, their goods become less competitive while imports into their home market become more so. Export sales fade while repatriated profits count for less. So, given that the great majority of European blue-chip firms are big exporters and that the euro has risen by some 50% against the dollar since its low in July 2001, why are European businessmen not depressed? France's business-confidence index has been rising since last June. Germany's IFO confidence index rose for nine consecutive months until a small blip in February. Only the Italians are gloomy, owing to their financial scandals. European businesses have been able to cope with a strengthening euro because of strong global growth and their use of foreign investments and hedging to protect against currency risk. Across the board, European firms lost between 8-10% in revenue growth because of the weakness of the dollar last year, says Walter Kemmsies of J.P. Morgan. Even so, European firms have been lucky--in particular, the recovery of the capital-expenditure cycle is soothing the euro pain, says Joachim Fels, an economist at Morgan Stanley. The euro's appreciation coincided with rising demand for European goods. In their budgeting for the coming year, now reaching its conclusion, most European firms are assuming that the dollar will stay around $1.20 to the euro. But BMW, for one, thinks that the euro is now overvalued, and has stopped hedging against further falls in the dollar.

Discusses the implications for Europe's producers and consumers under a European Community with economic and monetary union. Issue of a single European currency; Trade in Western Europe; Frontier controls; Public procurement; Financial services; Supply-side effects; Objections to a single currency; Transaction costs; Details. INSET: Fiscal federalism.

Explains the planned second phase of the European Monetary Union. Outline of drafts submitted by monetary union officials; Reaction from member countries of the European Union.

Argues that Europe's pause over economic and monetary union (EMU) is a chance to rethink the proposed Delors plan. Shortcomings of single currency idea; Need for European central bank constitution; Effects in terms of both macroeconomics and microeconomics; Need for stable-price economic and monetary union (SPEMU); British Prime Minister Margaret Thatcher's search for an alternative to the Delors plan; Outlook.

This article discusses politics and government in Great Britain under prime minister John Major. He is in disagreement with the Chancellor of the Exchequer Kenneth Clarke over Europe. The Tory party pledged to hold a referendum before entering European monetary union. The cabinet refused to rule out entry before the elections.

Remembers the late Pierre Werner, the so-called father of the euro, because he first suggested that Europe adopt a common currency. Assertion that a common currency would bring peace to Europe; Biographical information, including how he was once the prime minister of Luxembourg, and how his experiences during World War II convinced him that Europe had to be changed for the betterment of its people.

Presents the author's opinion of how British Prime Minister Tony Blair views his country's involvement in the European Union. His meeting with other European Union countries' leaders at Portschach in Austria; How the European Union is failing to move Britain's way; Preparation needed whether or not Britain joins the European common currency or not.

Discusses the global economic implications of the economic and monetary union (EMU) in Europe. Lack of attention being paid to EMU outside Europe; Effect of the creation of single currency on world's monetary arrangements; Impact of monetary union on currency volatility; Belief of economists and policymakers that euro will eventually play a more important global role than its constituent European currencies.

Focuses on divisions in Great Britain's Labour Party and Conservative Party regarding a single European currency. Controversy over the matter at the Labour Party's conference in Blackpool, England in 1996; Prospects for debate at the Conservatives' conference in Bournemouth in October 1996; Information that Great Britain may pay a price for staying out of the European Union membership in the shape of an interest-rate premium over single-currency countries; Implications of this controversy for Britain and Europe.

Advises that if the economic and monetary union (EMU) is to have a safe flight, then governments have to do more than simply name a single currency and fix a date for its introduction. The benefits of a single European currency; The possibility of asymmetric shocks; The factor of devaluation; The flexibility of prices and wages; Indeterminate whether any particular region is an optimum currency area.

Shows that the prospect of monetary union poses difficulties for financiers as well as the European Union's (EU) politicians. The possibility of complex and costly legal problems; The chief cause for concern; Long-term cross-currency swaps involving national currencies within the EU; Studying the impact of a single currency on contracts denominated in ecus--a weighted basket of 11 European currencies.