With the clock ticking down to the introduction of the new unified European currency on January 1, euro boosters are working overtime to make sure it has a good reception in Asia. The general line they take is the obvious one: 'You can't afford to ignore us any longer.' It is an argument which is in fact directed mostly at the US dollar. What they are really saying is: 'You people in Asia can't afford any longer to choose only the US dollar for your international transactions and savings.' To back this up they point out that the 11 countries in the euro scheme have a greater population than the United States, boast only a slightly smaller economy than the US, import far more goods than the US (although they cheat on this data by including intra-bloc trade) and lend more money to Asia than the US. But, they say, Asia - which has the world's largest foreign currency reserves - continues to denominate those reserves mostly in US dollars while only 12 per cent of the money is denominated in European currencies. Thus the logical move after January 1 is for Asia to strike a more appropriate balance by switching some of the money from US dollars into euros and, while doing it, consider the euro for transacting trade and look at European stock markets, where market capitalisation is low relative to gross domestic product. You may have thought the euro was all about making it easier for Europeans to do business with each other by removing the nuisance of having to shuffle through 11 different currencies; but listen to this pitch and you hear a plea of wounded national pride seeking to re-assert itself against the US. One thing is glossed over in the pitch, however, and for Asia it is a crucial consideration. Look at the accompanying chart on capital flows into the US. It shows you that the amount foreigners spend on buying assets in the US has risen enormously in recent years and is now running at US$600 billion annually. This is the rest of the world saying that it is running scared of emerging markets and slow growth economies elsewhere and thinks the US dollar offers not only safe havens but lucrative ones too. In a way it has made Americans lazy. They can afford to buy ever more goods and services from foreigners than they sell to foreigners because this growing current account deficit on their balance of payments is easily filled by the enormous inflow on the capital account. But let's say the euro suddenly finds wide acceptance as a currency of investment and inevitably the capital flow into the US starts to swing the other way. The current account deficit will certainly make a big difference then to the way Americans live. They will have to fill that hole through their own efforts and it will easily lead to a weaker US dollar, higher interest rates and much severe enforcement of trade regulations than Asian countries have suffered for a long time. It's a knife's edge on which Asian central bankers are balancing if they make a big shift to the euro. Unless it works exactly right the usual chain of events will assert itself. Interest rates will rise along with US rates, trade surpluses with the US will be trimmed way back, capital flows from the US will dry up and economic recovery could be halted in its tracks. Perhaps capital inflows from Europe would counterbalance these gloomy trends but it's all highly uncertain. The only way to go here for Asia is softly, softly. The euro boosters have their own interests at heart, not ours.