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Jörg Bibow* 1 INTRODUCTION As the tenth anniversary of the euro’s launch neared, European Union (EU) policy makers felt they deserved to be in celebratory mood. Economic growth in the core of Europe had finally picked up in 2006 and the dark clouds that had appeared in the seemingly bright blue sky since August 2007 were believed to pass by Europe’s “zone of stability” thanks to diligently pursued “stability-oriented” macroeconomic policies that had steered the union away from “global imbalances” elsewhere in the world economy. EU Commissioner for Economic and Monetary Affairs Joaquín Almunia (2008) probably captured the mood of European pride about being a “pole of stability for the global economy” well when he declared in a foreword to the official EMU@10 success story volume that must have been written early enough in the year: A full decade after Europe’s leaders took the decision to launch the euro, we have good reason to be proud of our single currency. The Economic and Monetary Union [EMU] and the euro are a major success. For its member countries, EMU has anchored macroeconomic stability, and increased crossborder trade, financial integration and investment. For the EU as a whole, the euro is a keystone of further economic integration and a potent symbol of our growing political unity. And for the world, the euro is a major new pillar in the international monetary system and a pole of stability for the global economy. As the euro area enlarges in the coming...