European Monetary Union

FRENCH VOTERS will choose in the parliamentary election starting today between the welfare state to which they feel entitled or a common European currency the year after next. That is, they must choose between a leftish party and the ruling conservative coalition. Both promise the French can have it all; neither means it.Two center-right parties knocked the Socialists out of the box in the 1993 parliamentary elections, winning four-fifths of the seats. In 1995 Gaullist Jacques Chirac won the presidency long held by Socialist Francois Mitterrand.

OFTEN, the Royal Swedish Academy of Sciences preaches to the world in awarding Nobel Prizes for Economics. It suggests what theories, policies or nostrums are good for nations that may regard them as bitter medicine. But in awarding the 1999 Nobel Prize to Robert Mundell, the Academy is sending a message to the Swedish people.Sweden belongs to the 15-nation European Union (EU) but not to its 11-nation European Monetary Union (EMU). Sweden qualifies to adopt the euro as currency in place of the krona, but declines.

OFTEN, the Royal Swedish Academy of Sciences preaches to the world in awarding Nobel Prizes for Economics. It suggests what theories, policies or nostrums are good for nations that may regard them as bitter medicine. But in awarding the 1999 Nobel Prize to Robert Mundell, the Academy is sending a message to the Swedish people.Sweden belongs to the 15-nation European Union (EU) but not to its 11-nation European Monetary Union (EMU). Sweden qualifies to adopt the euro as currency in place of the krona, but declines.

It was mid-1997 and First Maryland Bancorp's Joe O'Sullivan was phoning corporate clients to see if they had an interest in a seminar on the proposed European Monetary Union, slated to go from plan to reality Jan. 1, 1999.In making his inquiries, O'Sullivan, managing director of the banks' foreign exchange business, referred to the union by its acronym, EMU, pronouncing it -- like everyone else -- as "ee-moo.""One of my first phone calls was to a young man who wanted to know why we were making a presentation on the alternative white meat," O'Sullivan recalled, laughing.

In just over two weeks, French voters will decide whether the dream of European monetary union lives or dies. Yesterday, bargain hunters in European bond markets decided to bet that it would survive.That bet sent the prices of bonds denominated in European currency units, known as ECUs, up sharply for the first time in months. That market, into which investors were piling as recently as this spring, had almost collapsed.Yesterday's rapid price increase drove the yield on the Paribas 10-year ECU bond index down to 9.65 percent from 9.85 percent Tuesday, according to Deutsche Bank.

NEW YORK -- The dollar fell to a new low yesterday against the German mark amid signs that U.S. consumers have become less confident about their economic future and that French voters might reject the European monetary union.The dollar finished at 1.3998 German marks, down from Monday's close of 1.4021 marks.The dollar weakened after the Conference Board reported an unexpected drop in its index of consumer confidence, to 58 in August from 61 in July.Shortly afterward, the dollar tumbled to a record low of 1.3955 marks after several opinion polls suggested that French voters are narrowly divided on the Maastricht treaty for European monetary union.

AMERICAN TOURISTS in Europe find their dollars going further than expected. But American exporters face a daunting challenge as the prices they must charge for goods rise above competitors'.That's the good news/bad news of the surge in the dollar against European currencies, especially the Deutsche mark. Going on since February, when the Group of Seven finance ministers implied they were halting this trend, it spiked last Monday. At least the dollar has not been gaining recently on the Japanese yen, as it was in the past year to the detriment of U.S. trade and payments balances.

Entreaties from Washington and Wall Street meant nothing. When Germany's cantankerous Bundesbank decided to lower its interest rates Thursday, it did so for reasons strictly European and domestic. These reasons will not go away because of the marginal reductions. Look for further cuts in which the sluggish American recovery will be a decided beneficiary.It is fruitless to figure what factor finally impelled the German central bank to act. Probably it was a convergence of two forces generating pressures that could not be denied.

PARIS -- The arrival of a common European currency is a watershed in the relationship of the United States to the new Europe.It is the most important event for European integration since the Treaties of Rome in 1957. It promises to be the most important event for the United States since Communism collapsed.Since 1989, the United States has been, in economic and military terms, the most powerful state in the world. Washington has imagined no serious challenge to American power until the distant future.

PARIS HAS COME TO A HALT and France to paralysis in a brutal confrontation between the 1990s and the 1960s, the new right and old left, the future and the past. In the interest of European monetary union, a strong French economy and a healthy Europe, President Jacques Chirac should prevail in this struggle. He may not.The French people, having elected Mr. Chirac in May, don't much like him. He campaigned promising lower taxes and more jobs only to see the priority, once in office, for higher taxes, reduced health benefits and cutbacks of cushy perquisites for public sector workers.

PARIS -- The arrival of a common European currency is a watershed in the relationship of the United States to the new Europe.It is the most important event for European integration since the Treaties of Rome in 1957. It promises to be the most important event for the United States since Communism collapsed.Since 1989, the United States has been, in economic and military terms, the most powerful state in the world. Washington has imagined no serious challenge to American power until the distant future.

AMERICAN TOURISTS in Europe find their dollars going further than expected. But American exporters face a daunting challenge as the prices they must charge for goods rise above competitors'.That's the good news/bad news of the surge in the dollar against European currencies, especially the Deutsche mark. Going on since February, when the Group of Seven finance ministers implied they were halting this trend, it spiked last Monday. At least the dollar has not been gaining recently on the Japanese yen, as it was in the past year to the detriment of U.S. trade and payments balances.

FRENCH VOTERS will choose in the parliamentary election starting today between the welfare state to which they feel entitled or a common European currency the year after next. That is, they must choose between a leftish party and the ruling conservative coalition. Both promise the French can have it all; neither means it.Two center-right parties knocked the Socialists out of the box in the 1993 parliamentary elections, winning four-fifths of the seats. In 1995 Gaullist Jacques Chirac won the presidency long held by Socialist Francois Mitterrand.

PARIS HAS COME TO A HALT and France to paralysis in a brutal confrontation between the 1990s and the 1960s, the new right and old left, the future and the past. In the interest of European monetary union, a strong French economy and a healthy Europe, President Jacques Chirac should prevail in this struggle. He may not.The French people, having elected Mr. Chirac in May, don't much like him. He campaigned promising lower taxes and more jobs only to see the priority, once in office, for higher taxes, reduced health benefits and cutbacks of cushy perquisites for public sector workers.

Entreaties from Washington and Wall Street meant nothing. When Germany's cantankerous Bundesbank decided to lower its interest rates Thursday, it did so for reasons strictly European and domestic. These reasons will not go away because of the marginal reductions. Look for further cuts in which the sluggish American recovery will be a decided beneficiary.It is fruitless to figure what factor finally impelled the German central bank to act. Probably it was a convergence of two forces generating pressures that could not be denied.

In just over two weeks, French voters will decide whether the dream of European monetary union lives or dies. Yesterday, bargain hunters in European bond markets decided to bet that it would survive.That bet sent the prices of bonds denominated in European currency units, known as ECUs, up sharply for the first time in months. That market, into which investors were piling as recently as this spring, had almost collapsed.Yesterday's rapid price increase drove the yield on the Paribas 10-year ECU bond index down to 9.65 percent from 9.85 percent Tuesday, according to Deutsche Bank.

South of Netherlands proper on the map is an appendage, surrounded by Belgium on the west and Germany on the east, closer to France and Luxembourg than to Amsterdam. The chief town is Maastricht. It would be hard to find a more "European" place.Today and tomorrow, the heads of the 12 governments in the European Community will meet in Maastricht to iron out the sticking points after year-long negotiations at lower levels on two agreements: one, for a future European monetary union (or Emu, which is also a fat bird that does not fly)

NEW YORK -- The dollar fell to a new low yesterday against the German mark amid signs that U.S. consumers have become less confident about their economic future and that French voters might reject the European monetary union.The dollar finished at 1.3998 German marks, down from Monday's close of 1.4021 marks.The dollar weakened after the Conference Board reported an unexpected drop in its index of consumer confidence, to 58 in August from 61 in July.Shortly afterward, the dollar tumbled to a record low of 1.3955 marks after several opinion polls suggested that French voters are narrowly divided on the Maastricht treaty for European monetary union.