On Friday, Benjamin J. Cohen gave a talk at FU Berlin. Cohen, who is a professor of International Political Economy at UC Santa Barbara, is probably most famous for his work on the Geography of Money. He was invited by the KFG and the International Research Training Group “Between Spaces” to talk about the future of the euro as an international currency.
As the somewhat pessimistic title of the lecture – “The Euro Today: Is There A Tomorrow?” – suggests, this was not meant to be a pep talk for worried Europeans. In fact, Cohen’s short answer to his own question is: No, the euro will not bounce back from its current crisis, but instead face a “long, lingering slide into marginality”.
First, some preliminaries: Cohen was not talking about the future of the currency as such, but specifically about the euro’s role as an international currency: To what extent will it be used by non-members of the eurozone – not as a substitute domestic currency (“dollarization“), but for international purposes? More technically, the question is about the use of a currency as a unit of account, store of value, and/or medium of exchange.
To put it short, the argument here is that the euro is nowhere close to the dollar both in scope (which functions it fulfills) and in domain (where / by whom it is used).