To the extent that the United States has, I do not like the word hegemony, the United States has influence around the world, I do not think that is based on to any significant degree on the fact that countries use the dollar as their major reserve.- Robert C. Solomon
There's a stability and growth pact which was agreed for the eleven countries which tries to limit the size of budget deficits among the eleven countries.
There is a European Central Bank, of course, established and it has the structure similar to the Federal Reserve system, not precisely the same but similar.
There has been talk in Europe about American hegemony being somehow based upon the use of the dollar in the world. I just do not see that connection at all.
The United States as usual has a sizable deficit in the current account of its balance of payments, trade account and other current accounts, current account items.
The reserve currency role seems to add prestige to an area and some people in Europe have talked about the desirability of the euro becoming an international reserve currency.
The prices of all imports would rise if the dollar depreciates.
The major material advantage, financial advantage from having a reserve currency is that between 200 and 300 billion dollar bills, that may be twenty, fifty, hundred dollar bills as well as ones, exist in the world - a lot of them in Russia as you all know I am sure.
The dollar went up some eighty percent in real terms as I recall now or something like that - from '80 to '85.
The dollar is currently the principal reserve currency in the world.
Some countries that are close to Europe that already hold Deutschemarks, clearly would automatically hold euros, those are countries in Eastern Europe mainly, a few countries in Africa.
So if the euro, if Euroland is to become a reserve center, if the euro is to become a reserve currency, Euroland will have to have a deficit in its overall balance of payments.
On private transactions, I will just go very quickly now, a major difference between the United States and Euroland is that in Europe banks are much more important in financial transactions than in the United States.
Love can be understood only "from the inside," as a language can be understood only by someone who speaks it, as a world can be understood only by someone who lives in it.
In the United States, securities markets are much more developed than they are in Europe.
