Between national sovereignty and international power: what external voice for the euro?

Does the creation of the euro imply that the European Union is now speaking with one voice in international monetary matters? Is the EU therefore likely to challenge the hegemony of the United States on the world stage, at least in the realm of international financial diplomacy? This article analyses the current state of external representation of the common currency and asks why the issue of the euro's single voice has not yet been resolved. Comparing other areas of common policy-making that have an external dimension, such as trade, the authors explore the specificities of monetary and financial affairs that make the conflict between national sovereignty and international efficiency so difficult to settle. In particular, the authors focus on a set of international institutional arrangements regarding economic policy-making within the EU, and external arrangements within international fora (the IMF and the G(7)), which have so far impeded the ability of the EU to play a coherent role on the international monetary stage. The authors argue that the fact of the euro means there needs to exist a clear system of political representation in the area of monetary and financial governance in the EU, and they explore various options for who the external voice of the euro could be. Finally, the implications of creating the euro's external voice for transatlantic relations, for EU enlargements, and for the debate about the 'democratic deficit' in Europe are analysed.