Has the euro been a success, in its first 1 ½ years life? The answer is simple. It has been a success as a new international currency. But it has not been a success as a currency in which to invest; that is, it has gone down in value. These are two distinct aspects of a currency -- the extent to which it is used internationally and its value on the foreign exchange market. It would be wrong to say that there are no connections whatsoever between international use and foreign exchange value. Indeed, there are causal links in both directions. If there is a decline in the use of a currency as a store of value, e.g., if central banks around the world switch their reserves out of that currency into others, that may cause a depreciation. And conversely, a currency that has a reputation for losing value will not be a good candidate for international use. But the correlation is less than one would think. In particular, the rankings of the currencies in international use -- euro, dollar, pound, yen, DM, Swiss franc, SDR -- tend to change quite slowly over time -- on the scale of decades -- whereas the exchange rates among them can change rapidly -- large movements on the scale of months, or even days. The financial press from time to time goes through a period when it confuses the international currency question with the exchange rate question, and I think it may be doing so again now with the euro.