Another question has been raised rather widely in Europe, in Japan as well as in the United States is what, to what extent will the euro become a reserve currency.
Back in those days, in the fifties and sixties, countries had balance of payment's deficits or surpluses, those were reflected much more than today in movements of reserves among countries.
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On private transactions, I'll just go very quickly now, a major difference between the United States and Euroland is that in Europe banks are much more important in financial transactions than in the United States.
So if the euro, if Euroland is to become a reserve center, if the euro is to become a reserve currency, Euroland will have to have a deficit in its overall balance of payments.
Some countries that are close to Europe that already hold Deutschemarks, clearly would automatically hold euros, those are countries in Eastern Europe mainly, a few countries in Africa.
The major material advantage, financial advantage from having a reserve currency is that between 200 and 300 billion dollar bills, that may be twenty, fifty, hundred dollar bills as well as ones, exist in the world - a lot of them in Russia as you all know I'm sure.
The reserve currency role seems to add prestige to an area and some people in Europe have talked about the desirability of the euro becoming an international reserve currency.
The United States as usual has a sizable deficit in the current account of its balance of payments, trade account and other current accounts, current account items.
There has been talk in Europe about American hegemony being somehow based upon the use of the dollar in the world. I just don't see that connection at all.
There is a European Central Bank, of course, established and it has the structure similar to the Federal Reserve system, not precisely the same but similar.
There's a stability and growth pact which was agreed for the eleven countries which tries to limit the size of budget deficits among the eleven countries.
To the extent that the United States has, I don't like the word hegemony, the United States has influence around the world, I don't think that's based on to any significant degree on the fact that countries use the dollar as their major reserve.
