BY MIA CARLEY

At that time there was a movement afoot in Europe towards a common currency, but in order to qualify countries had to reduce their public debt from 6 to 3 percent by 1999. Since France has a heavily subsidized public sector that consumes a large chunk of the country's budget, the government naturally tried to reduce spending in this area in order to qualify for the future common currency. It was called the Jupp Plan; in it, prime minister Alain Jupp proposed scaling back pensions and raising the retirement age, freezing wages, and increasing the amount of hours they worked. (For more, read Thomas Sancton's 1995 article "Is This A Crossroads -- Or The Edge Of A Cliff?" in Time magazine.) I'm sure Chirac and Jupp anticipated strikes, but I doubt they ever imagined they would continue as long as they did or that a large percentage of the private sector would support the striking workers.

Europe 2002
Fast forward to this past New Year when Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, The Netherlands, Austria, Portugal, and Finland introduced the new euro bank notes and coins officially into circulation, even though it's been trading on the exchanges since 1999. (Denmark, Sweden, and the United Kingdom have not launched the single currency, even though they are members of the European Union. For more info on the euro, visit the European Central Bank.) France succeeded in their goal and was able to join the common currency, a feat that frankly, I thought they would never achieve. After witnessing those strikes and the power of the public workers, it was clear to me that the French government had their work set out for them.

The launch of the euros into actual circulation didn't get too much press over here, except for news item that warned eating more than 400 of the new notes could be fatal. Yet the debut of the euro is hardly something that should be ignored by the U.S. The adoption of a single currency by 12 European countries is extraordinary, and the European Union is an economic force to watch. I can't imagine the U.S. ever agreeing with and sticking to budgetary guidelines -- even if we created them ourselves -- in order adopt a single currency with other nations. A country's monetary unit is a powerful cultural and historic emblem. To willingly give that up to be part of larger entity is a bold move.

From a business standpoint, the common currency makes sense. The union should help break down trade barriers by removing tariffs and restrictions on goods moving throughout the community, thereby reducing costs. The euro should also be a more stable currency since it has 12 economies supporting it, and vice versa, I would imagine a strong currency would help along a struggling economy.

However, critics of the common currency point out an important loss of sovereignty. The idea of other countries having a say over your own monetary policy is worrisome. Even though participating countries are represented in the decision making, the fact stands that other countries with their own interests could possibly dominate policy. That's a frightening thought if you're one of the smaller countries in the group, and less influential on the economic market. I can imagine that labor unions across Europe are bracing themselves for the worst and wondering how this new economic union will determine their futures.

Back in 1995, I never thought the European Union would ever achieve its goal of a common currency. There seemed to be too many economic and cultural barriers to ever bring so many countries in line to create a stable community. Now that it's actually been achieved, it will be interesting to see how Europe's -- especially France's -- generously subsidized public sector and protected industries will fare in the new world market.

Mia Carley welcomes your comments at mcarley@tmcnet.com.

This article originally appeared on TMCnet.com in January 2002.