The formation of a European Economic and Monetary Union (EMU) constitutes the single most important event in European and transatlantic politics since the Soviet Union's demise. There is a strong case that the euro is likely to succeed, and that its success will push the European Union (EU) towards rounding out its commercial and financial power with more effective and autonomous collective diplomatic and military capabilities. As the EU grows into a better-organised and assertive economic and financial superpower, it seems improbable that the old dependent relationships - whereby the US takes charge of most European security problems - will remain acceptable to either Europeans or Americans. To succeed with the euro, moreover, the EU will need to change its internal character significantly, as well as the nature of its expansion to the former communist states of East and Central Europe.