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THE CURRENCY CRISIS SHOWS EUROPE'S WEAKNESS, RIFTS

Let's hope that the current turmoil in Europe's currency markets blows over quickly.

If it doesn't, this financial crisis could do much more than just kill present efforts to turn the continent's 12 leading industrialized countries into a United States of Europe.On top of all that, the lack of confidence spawned by these countries' failures to coordinate their economies could deepen the global recession and drag down economic growth.

Eventually, the United States could suffer, too, if Europe stagnates, reducing the demand there for American imports.

Here, briefly, is what has been happening. For more than a week, currency traders have been abandoning other European currencies in favor of the continent's strongest - the German mark. The mark has become even more attractive to investors as fears increase that French voters on Sunday will reject the Maastricht Treaty on European political and economic union.

But the problem goes deeper than that. Germany's central bank has kept interest rates exceptionally high to attract the investment capital needed to pay for the steep price of absorbing the former East Germany after reunification. Before buying German marks, investors have to sell their own currencies.

The effect is twofold: First, it has driven up the price of the mark in relation to other currencies. Second, it has forced other countries to hike their own interest rates so they can keep attracting the investment money they need.

By raising borrowing costs for individuals and businesses, high interest rates slow economic growth and increase unemployment.

In response, Britain and Italy have abandoned the European currency system that for more than a decade has limited the fluctuations of currencies of member countries with an eye to creating the stability needed to reassure consumers and allow business leaders to make long-range plans.

Complicated, isn't it? A couple of important points are unmistakably clear, however. One of them is that if the currency crisis and the short-sightedness of French voters kill the Maastricht Treaty, Europe will muff an opportunity to create an economic superpower that could rival the United States and Japan. The other point is that in an increasingly global economy, what happens in one country inevitably affects what happens elsewhere.

The current crisis could blow over. But that's not likely to happen - at least not quickly - unless French voters on Sunday restore investors' faith in the willpower and ability of Europe to weld its diverse peoples into a unified economy.