It is a great pleasure for me to be here and I thank you, Robert Isaak, for that wonderful introduction; it was very interesting. I am of course going to talk about the euro, but by way of preface, I will tell you about some of my recent journeys. Two weeks ago I was in Spain at the Euro Forum Conference in the El Escorial Palace outside Madrid, the splendid mausoleum/palace/monastery built by Philip II of Spain to celebrate the occasion of his victory in the Battle of San Quentin on St. Laurence's Day in 1557. This was a conference dedicated to the occasion of the Spanish presidency of the European Union, a report of progress on past commitments and on the challenges ahead. The Lis bon Summit Conference in March 2000, spearhead ed by Prime Minister Tony Blair of the UK and President Jose Aznar of Spain, set the goals of improving the employment performance of the EU and making it the most competitive area in the world by the year 2010. After that conference, I came west to Havana, the home of cigars and Fidel Castro, to present a paper at the third of Castro's Conferences on Glob alization and Development Problems that he had initiated in the year 2000. Beside myself there was my colleague from Columbia University and the Nobel Laureate in Economics for 2001, Joe Stiglitz. We spent altogether about fifteen hours with Castro over three days, talking and listening over meals and presentations. Stiglitz and I each had a two hour slot at the beginning of the conference. Stiglitz focused on the problems of globalization and the errant policies of the international institutions. I focused on international monetary arrangements, currency areas, power centers and the need for a global currency. Fidel then spoke for an hour and a half, after which we had dinner with him and there followed another two hours of discussion. At about 9:30 p.m., he excused himself to see Senator Bar bara Boxer and the California delegation, which, he said, were interested in helping to get the embargo on Cuba lifted. After Cuba, I went back to Europe, to London, to inaugurate a new exhibit at the British Museum. The exhibit, called Brief Lives, did not seem to be my cup of tea, but the Chairman of the Museum, Graham C. Greene (nephew of the great novelist), explained that the sub-title was Currencies and Nationalism in Modern Europe. The currencies of twelve of the fifteen members of the European Union were going to self-destruct within a couple of months and the staff had prepared an exhibit to celebrate their passing into history. Were the lives of European currencies so brief? There is a widespread belief that they had long lives. The reason I think is that the names for cur rencies are distinct from the actual pieces of paper or coins. Some of the names have existed in the lan guage for thousands of years and have become part of the national consciousness. The Greek obol for instance means digit, and drachma means handful. So the drachma was a handful of six obols. You could repeat such stories for all the currencies. Our word is derived from the surname of Juno Moneta, or Juno the Warner, a consort of Jupiter, whose duty it was to warn the Romans that if they fought only just wars, they would never lack for money to finance them. The name and symbol of the pound goes back to Roman times. But the pound as a medium of exchange (as opposed to a unit of account) is not nearly so old. The pound coin goes back only to the reign of King Henry VII, the first Tudor king, who succeeded Richard III, the hunchback. The first pound coin was a big, but very thin coin, first cre ated at the end of the 15th century. Its successor, the pound or the sovereign in the 19th century was much smaller but thicker. How did the pound originate? We have to start with the Roman Empire. The Romans had two words for pound: pondos, which comes from the
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