Financial Crisis and Changes in the International Monetary System Implications for Euro

Abstract

Having an international currency brings some benefits but also important obstacles. Undoubtedly, it is positive to have international money but the process of achieving the status of global money may lead to some costs connected with the appreciation of the euro. The main goal of this article is to show that one of the probable scenarios of the post-crisis adjustment in the international monetary system is the risk of the euro overvaluation. It can be a result of the diminishing role of the U.S. economy and the growing role of the euro as an international currency. Paradoxically, thanks to its success, the euro can be exposed to the overvaluation with important implication for the euro area countries as well as candidate countries.