Thus, markets assess very carefully, on a continuous basis, the internal economic and fiscal policies of the member countries of the euro, especially of the big economies. A failure to implement the necessary structural reform, especially in labour markets, and/or a backsliding on fiscal consolidation would present a serious risk for the prospects of the new currency, especially in foreign exchange markets. VI.
On the other hand, the hope is justified that the euro will function as a catalyst for fiscal consolidation and structural reform. The euro could create peer pressure for best practice in economic policies among European governments.