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International Role Of The Euro

Summary/Abstract: The paper analyzes the euro asan international currency, primarily through the analysis of the functions that enabled it to become an international currency. The most frequently asked question is whether the euro can take a dominant role in the international monetary system or even replace the dollar as the leading international currency. Such considerations are based on the fact that the euro fulfills all preconditions for the role of the main reserve currency. Those preconditions are: stable political framework combined with a large and liquid capital market, and the support of large and dynamic economies. The creation of EMU (European Monetary Union), which is comparable in size to the USA, and the appearance of the euro as an important international currency has had a powerful influence on the integration and development of the financial market in Europe. Although the euro has not reached the status of the dollar, its international role has grown in the first decade of its existence.

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