With the adoption of the euro as the single monetary currency in Europe, many American businessmen are wondering whether Europe is now an even better place to do business.
Only Sweden, Denmark and the United Kingdom have retained, at least for the moment, their own individual national currencies. The fact that the UK is also the top destination for U.S. companies expanding into Europe somewhat limits the lessons we can draw from the euro but, in theory at least, having a single standard currency for Europe can't be anything but good news for U.S. companies.
However, its importance to Americans has a tendency to be overblown at times. Actually, all it really does is reduce to two currencies - the euro and the dollar - the element of foreign currency fluctuations from the day-to-day business picture.
For some of the more financially nimble companies, the foreign exchange market provided an opportunity to make a little extra money on the float. For most, however, all it did was add an element of uncertainty to the equation, the degree of uncertainty being directly related to the strength of the foreign currency in question.
To say that having a single currency in Europe will allow American businessmen to more accurately compare costs and prices assumes that these CEOs are so math-challenged that they have to take their shoes off in order to count to 20.
In fact, for us Americans, the euro represents more of a convenience that a major life-saver. In truth, it's far more important to the Europeans than it is to us.
What it really is is a major step toward the full and total integration of Europe into a single political and economic entity, kind of like the United States. With that will come more uniform laws and regulations that will, hopefully, make commerce between the two sides of the Atlantic even easier than it already is.
However, even back in the old days (i.e., prior to January 1, 2002), Americans did a lot more business with Europe and its multitude of monetary currencies than it did with Brazil or China or Russia, each with its own single currency.
That's because it's not the currency, but rather the market that's most important. If there's enough money to be made, American businessmen will be there, regardless of how many different units of measurement are involved.
With that said, let's get down to business.
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