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Davos abuzz over the euro
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January 28, 2000: 12:45 p.m. ET
Europe's currency, under pressure, dominates talk at elite's annual meeting
By Staff Writer Rod Cant
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DAVOS, Switzerland (CNNfn) - The travails of Europe's single currency are becoming the dominant factor at this year's meeting of the World Economic Forum, driving the expected topic of e-commerce from center stage.
As the euro sinks ever lower, hitting a new low of $0.9739 against the U.S. dollar Friday, bankers and industrialists have attempted to talk up the fledgling currency. A long list of central bankers, economists and company bosses advanced reasons why the year-old currency has enjoyed a worthwhile beginning, despite sliding more than 15 percent against the dollar.
"The euro has enormous long-term potential," commented one leading European corporate chief, and he sought to explain the currency's woes by explaining, "but the short term requires significant restructuring, and that will be painful."
European Central Bank Vice-President Christian Noyer refused to comment on the euro's recent record against other currencies.
Other economists rushed to defend the currency, pointing out that the first year had passed off without major setbacks in terms of technical payment systems and the take-up of the euro in capital markets. The number of euro-denominated corporate bonds far out-stripped dollar-backed bonds in the final quarter of 1999.
The slide in the currency's value hasn't put off some proponents of the common currency. Willem Buiter, a member of the Bank of England's rate-setting committee, said he stuck to his opinion that Britain should have joined Economic and Monetary Union when it was formed on Jan. 1, 1999.
But, he added, "It wouldn't make sense at the current level, of course."
Britain's Prime Minister Tony Blair reiterated the fact that his nation will not be joining EMU anytime soon in a speech earlier Friday. Blair stuck to his line that a referendum will be required, and economic conditions will have to be more favorable before taking that step. 
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World Economic Forum
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