The “four I's” of the international monetary system and the international role of the euro

• Highlighting the main negative externalities of the current international monetary system.
• The euro cannot replace the US dollar the main international currency.
• The euro is an incomplete currency.

This article highlights the main sources of negative externalities in the current international monetary system, through a “four I's” approach (instability, incertitude, inequity and insufficiency of the aggregate demand). It then questions the ability of the euro to contribute to a more balanced and sustainable international monetary regime. The euro cannot become a major international currency without long-term growth in the Eurozone, without the creation of a unified marketplace for public debt backed by the European Central Bank, and without shared desire to internationalize the euro, particularly as an invoicing currency for trade.