The Coming Week in Europe: Looking Forward to an Undivided Europe

The anniversary of the fall of the Berlin Wall will be marked with a week of celebrations in Europe.
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BERLIN -- Tuesday will mark the 10th anniversary of one of the most influential events of the past century: the peaceful demonstrations of civil courage in East Germany that led to the fall of the Berlin Wall on Nov. 9, 1989, and transformed Europe's future overnight.

It is therefore fitting perhaps that Europe will not only celebrate the fall of communism and the end of the East-West conflict next week, but will also look forward to the more practical matters of extending democracy and free markets eastward.

Appropriately, the week will likely kick off with the fate of East Germany's last Communist leaders, to be decided Monday, when a court will rule on whether

Erich Honecker's

immediate successor,

Egon Krenz

, can be held accountable for the deaths of those killed trying to escape to the West.

Celebrations in the German capital will take the spotlight early next week, as former leaders such as

George Bush

,

Mikhail Gorbachev

and

Helmut Kohl

participate in a conference on the events leading up to the fall of the Iron Curtain. The same troika will figure in official parliamentary celebrations on Tuesday.

On Wednesday, the focus will shift to the future of an undivided Europe, as the

European Central Bank

holds consultations with the central banks from the prospective first wave of

European Union

applicants from Eastern Europe in Helsinki. Last week, ECB President

Wim Duisenberg

made a point of noting that all future members of the EU would have no choice but to join the

European Exchange Rate Mechanism

and would therefore almost certainly join the euro at some point down the road.

Financial markets will continue to mull over last Thursday's decision by Europe's monetary authorities to raise interest rates by half a point to 3%. Initial reaction to the aggressive hike was generally positive. Speaking at a press conference after the rate hike, Duisenberg said: "It is often difficult to contain market expectations. It's not our policy to try and surprise them. We want to be credible." The central banker did, however, say that if the ECB felt the need to surprise the markets in the future, it would not hesitate to do so.

"The irony of Mr. Duisenberg's remarks regarding the need to make a half-point move so as to calm market uncertainty is, of course, that it was the ECB which generated the uncertainty itself in the first place," says Alison Cottrell, an economist for

PaineWebber International

in London, referring to the changing language with which central bankers have discussed the economy over the past few weeks.

The rate move has plenty of Europeans grumbling about their mortgage costs. Imagine paying more for your chateau in Aix-en-Provence! And in dollar terms, even the

pastis

you'd like to drink while there will probably get pricier next week. Higher European rates will likely drag the euro higher against the greenback. The euro was recently trading near $1.042.

Then again, if you have a chateau in France, you probably don't have a mortgage and don't have to worry about the price of anise either.