Second – the limited depth and liquidity of euro area financial markets. And third – Europe not speaking with one voice on international matters, including national security. An international currency must be stable Take stability first. Empirical research confirms that, next to size and openness, stability is a key determinant of international currency use.
Divergence This ties in closely with our second key issue: divergence in economic prospects across economies, and consequently, divergence in monetary policies. We have been talking about this topic since early last year, and it has retained its relevance to the present.