The speech referenced in the article below and other speeches from
Travel Weekly's Euro Conference are available in their entirety,
exclusively on Crossroads.
NEW YORK -- The economic growth that the euro should bring to
Europe will also benefit the U.S., a noted economist told euro
keynote speaker of the conference luncheon, Zanny Minton Beddoes,
Washington correspondent for The Economist magazine and former
economist for the International Monetary Fund, said, "Europe will
grow faster and Americans will be better off, too," because
American exporters as well as American investors will benefit from
"To the extent that the euro increases U.S. economic growth, it
will clearly benefit the U.S. travel industry," she said. "A
faster-growing economy and higher corporate profits, after all,
mean higher disposable income." The adoption of the euro will make
it "not only cheaper but considerably easier for the typical U.S.
traveler in euroland," according Beddoes. Euroland -- a nickname
for the economic zone comprised of 11 western European countries --
is scheduled to kick off Jan. 1, an event that will create an
entity rivaling the U.S. in size and financial might.
Although some details of how the new system will work still are
unclear -- the dollar-euro exchange rate won't be set until Jan. 1
-- the general sense is that the euro's introduction will have more
pluses than minuses for the U.S. travel trade, Beddoes said.
Among other things, Beddoes predicted that there could be some
restructuring in European travel businesses due to the creation of
one economic system. "You're already facing substantial pressure
from the Internet and from the whole innovation that that brings,"
she said. "In Europe that will be exacerbated by this euro-induced
restructuring. The overpriced and inefficient agent in France will
face competition from his niftier Spanish colleague. And I would
think that would offer many opportunities for nifty U.S. travel
agents wishing to move into this market."
For travelers, too, there are "obvious benefits" deriving from
the new currency that travel agents can tout to their clients. The
most tangible advantage is the elimination of multiple currency
transactions -- the fees for which can be substantial, depending on
the number of countries visited and the amount of money being
Of course, not all predictions are positive, Beddoes noted. The
dollar-euro exchange rate will fluctuate on world markets, just as
the dollar does against other currencies. If the dollar weakens in
relation to the euro, then the cost of a European vacation will go
up for U.S. consumers. She said that volatility in the exchange
rate would be worse than a gradual weakening of the dollar's value
vs. the euro.
The effects of the euro will be felt well beyond the borders of
the 11 euro zone countries, said Beddoes. A number of eastern
European countries are "clamoring in the doors," and "even if
they're not yet members, they will tie their currencies to the
euro. That will broaden the whole notion of 'euroland' very
Minton Beddoes, The Economist
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