Explain the effects of trade in Europe

Answer: European Monetary Union-also known as the euro-zone and euroland-came into existence on January 1 among eleven countries of the European Union with a new currency-the euro-and a new European Central Bank. Having the same currency, the eleven countries are likely to enlarge their mutual trade. The euro's exchange rate will float in terms of the dollar and the yen. Some neighboring countries will adopt the euro as their reserve currency but it is likely to become a worldwide reserve currency, competing with the dollar, only gradually. The same is true of the euro's function as an international asset and means of payment for the private sector. The United States has every reason to welcome this further step in European economic and financial integration.