Bloomberg.com: EURO- crisis will fortify the currency union by broadening membership rather than shrinking it - says Morgan Staley's Elga Bartsch

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EURO- crisis will fortify the currency union by broadening membership rather than shrinking it - says Morgan Staley's Elga Bartsch

The euro region will start its second decade Jan. 1 in better shape than some economists once imagined possible. Even in the current recession, it has avoided the bank and currency runs that have plagued neighbors such as Iceland and Hungary. Foreign retailers and central banks increasingly use the euro, which reached a record $1.6038 in July and an unprecedented 87.26 pence against the pound last week. Elga Bartsch, chief European economist at Morgan Stanley in London, bets the crisis will fortify the currency union by broadening membership rather than shrinking it and boosting the reputation of its central bank. “It’s in testing times that the euro area’s mettle is likely to be shown,” she says. “Economic and monetary union will likely pass this first real test of its policy framework.”