by Douglas A. Rediker, Peterson Institute for International Economics
Testimony before the United States Senate Committee on Foreign Relations hearing on "European Union Economic Relations: Crisis and Opportunity."
May 23, 2013
While the purpose of today's hearing is not to rehash what led to the economic challenges currently facing the European Union, I would like to start my testimony with a reminder that the European Union is fundamentally a political project. Although the euro, as a common currency, is obviously an economic instrument, its introduction within the European Union remains principally an outgrowth of political motivations. Somewhat paradoxically, to understand European economic issues, one needs to always look primarily through a political prism.
The introduction of the euro was one step in an ongoing political project intended to ultimately lead to a deeper and wider integrated Europe, largely based on a set of basic values consistent with our own. While frustrating, inefficient, complicated, and often painful to watch, the evolution of the European Union is something we, as Americans, should encourage. Its future success serves our direct economic, financial, and strategic interests.
European leaders often note that their progress should be judged as one would in viewing a marathon and not a sprint. By that standard, it is still early in the race, and there are significant hurdles still ahead.
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