How EMU Will Level Europe's Playing Field
POLICIES
From high German taxes to a company's inefficient operations, problems will become glaringly apparent under a single currency. Over time, tax, regulatory, and labor market policies will become more homogeneous.
STOCK PRICES
Continental stock markets will gradually merge, and indicators like price-earnings ratios will converge. Investors will scrutinize shares next to pan-European rather than local competition.
FINANCING
As exchange-rate differences disappear, bond investors will focus on creditworthy companies with competitive returns. Lenders will gravitate to nations with the most favorable tax and regulatory policies.
DATA: BUSINESS WEEK
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