THE champagne toasts have been drunk, and 30,000 people have celebrated on the lawn in front of Europe's new central bank. Eleven countries have joined in the continent's first monetary union since the Roman Empire. Despite the birth pains of the euro, there can be no doubt that a page has been turned in the history of the world economy. Some members of what is now unofficially known as Euroland predict that their joint currency will rank alongside the US dollar in the new millennium.
If it is such a success, the euro will have a fundamental effect worldwide. But, even if it takes time for other countries to switch some of their reserves into the common European currency and for traders to use it like the dollar, the achievement is, in itself, already a very considerable one. The new system is bound to face strains, particularly if the economies of member countries get out of line with one another. The best hope is that low inflation and control of government spending will minimise the shocks.
Britain's decision to stay on the sidelines deprives Euroland of what should be its biggest financial centre, but the Prime Minister, Tony Blair, seems intent on not making up his mind about joining until he has a second general election victory in the bag.
Important as economics of the euro are, the prospects now being opened up in Western Europe go much further. The peace that has reigned in the region for the last half-century makes it easy to forget that this was the scene for three major wars in the previous 75 years. Germany invaded France in 1870, 1914 and 1940: now both are pillars of Euroland, and the disputes are over economic arrangements, not on battlefields. Naturally, disputes accompany the euro-launch - over tax policy and over whether the first head of the European Central Bank, Wim Duisenberg of the Netherlands, will step down after four years to make way for a Frenchman.
The next step on the European road involves two tricky issues - a joint foreign policy, which will mean further surrender of national sovereignty, and the widening of majority voting over matters which have previously been the preserve of individual governments. If both come to pass, the nations of Western Europe will become that much more united on the world stage as a counterbalance to Washington - even more so if they forge links with former Soviet bloc countries to the east.
