Introduction: Euroland and the World Economy — Global Player or Global Drag?

Three major developments in the global economy may be singled out as characterizing the early years of the twenty-first century. First, launched on the eve of the new millennium and meanwhile including 13 (and soon 15) European countries that have adopted the euro as their common currency, Euroland is a large and economically powerful currency area comparable to the United States, supposedly also creating a new important player in the global arena of trade and finance. Second, the rising of China and a broader South and East Asian region as a new growth centre of the world economy, in its turn shifting the world distribution of trade and investment flows. Third, an increasing polarization in international payment positions that seems at odds with conventional wisdom, with the United States under its economic and financial world leadership running mounting current account deficits that alone nearly offset the current account surpluses of the rest of the world including soaring surpluses across the emerging world.