Between national sovereignty and international power: what external voice for the euro? International Affairs 78,  () ‒ KATHLEEN R. MCNAMARA AND SOPHIE MEUNIER* º Who, exactly, speaks for Europe’s single currency? We do, says the European Central Bank, because we run monetary policy, and are therefore the guardians of its worth. We do, say the governments whose countries make up the European Union, because we created the euro, and the unelected people who run the central bank should have a vocal political counterweight. Too many people already speak for it, mutter currency traders … The Economist, 16 September 2000 The euro was created with the hope of providing economic benefits for the participant countries while further cementing European integration and contain- ing the power of the Bundesbank. 1 An additional rationale, however, was the empowerment of Europe on the international stage and the raising of its stature in global economic diplomacy. In so doing, it was hoped, the euro could offer an alternative to the hegemony of the US dollar and transform the international system from a unipolar, American-dominated structure into one in which Europe constituted a power equal to the US. Currency may be, after all, one instrument of international power. 2 The question of the international power of Europe is an important and hotly debated one. The EU is already one of the two most powerful actors in the world in the realm of trade, and it wields considerable influence in international trade negotiations. In foreign and security policy, by contrast, progress towards a unified stance has been very slow. Indeed, observers often refer to the EU as an economic giant but a political dwarf. Where does monetary integration fit into * Earlier versions of this paper were presented at the 2001 meetings of the European Union Studies Association and the American Political Science Association, as well as the Center of International Studies Fellows Seminar at Princeton University. We thank Barbara Haskel, Randy Henning, Peter B. Kenen, Daniel Verdier and seminar participants for comments, and are grateful to several anonymous European Commission and member states officials for their time and assistance. 1 See Wayne Sandholtz, ‘Choosing union: monetary politics and Maastricht’, International Organization 47, 1993, pp. 1–39; Andrew Moravcsik, The choice for Europe (Ithaca, NY: Cornell University Press, 1998); Kenneth Dyson and Kevin Featherstone, The road to Maastricht: negotiating economic and monetary union (Oxford: Oxford University Press, 1999); Kathleen R. McNamara, The currency of ideas: monetary politics in the European Union (Ithaca, NY: Cornell University Press, 1998). 2 Jonathan Kirschner, Currency and coercion: the political economy of international monetary power (Princeton: Princeton University Press, 1995).