The Introduction and Effects of the Euro
1 Introduction
The euro has been in existence just long enough to generate sufficient data for a first look at its actual performance, having been introduced in January 1999. This assessment presents eight studies that use post-1999 data to provide a first look at how the euro is actually affecting trade, financial markets, macroeconomic policy-making, and Europe¡¯s economic performance.
1.1 What is the Euro?
The Euro is the single currency used in 12 EU member states. The euro came into being in cashless form on 1 January 1999 when these member states formed an Economic and Monetary Union (EMU) and permanently locked the exchange rates of their currencies against the Euro. Euro notes and coins were put into circulation in these 12 EU states on 1 January 2002 .
1.2 Countries in the euro area
The 12 countries in the euro area are: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain and Greece. The United Kingdom (UK) has decided not to participate but has indicated that it may consider joining at a later date.
Euro notes and coins were put into circulation on 1 January 2002. The euro is part of the process of EMU. EMU is provided for in the Maastricht Treaty, which the people of Ireland endorsed by referendum in June 1992. As well as the Euro, EMU has involved the creation of an independent European Central Bank (ECB).
The euro is used also in Andorra, Monaco, San Marino and Vatican City. Several overseas territories of the 12 "Euro zone" countries use the euro: these include the Canaries, Madeira, the Azores and the French Outre-Mer territories (Guyana, Martinique, Guadeloupe, Reunion and the collective territories of Mayotte and St Pierre and Miquelon) .
2 Development of Euro
1 July 1990 Stage one of economic and monetary union begins. Capital movements in the EU Member States are fully liberalized (except where temporary derogations have been granted).
1 January 1993 The single market is completed.
1 November 1993 • The composition of the ecru basket is frozen.
• The Treaty on European Union signed in Maastricht enters into force.
1 January 1994 • The European Monetary Institute (EMI) is set up in Frankfurt.
• Procedures for coordinating economic policies at European level are strengthened.
• Member States strive to combat 'excessive deficits' and to achieve economic convergence.
31 May 1995 The Commission adopts Green Paper on the single currency (reference scenario for the transition to the single currency).
15 and 16 December 1995 • Madrid European Council
The European Union has been helped economically ever since World War II. Right after World War II’s end, Europe was struggling to hold on. The countries of the modern-day European Union thought it would be a good idea to come together and help each others struggling economy. To this day, this decision has had a very positive outcome on the EU’s economy. As shown in Diagram 1, the European Union combined together has the world’s highest GDP at 18.3 Trillion USD as compared to the United States’ 17.4 Trillion USD GDP and China’s 10.4 Trillion USD GDP. The idea
In conclusion, the European Union has “merged” the countries of Europe. It has developed a common currency called the Euro’s, and a Parliament located in Belgium, Luxembourg, and France. Also, ALL of the countries of the Union are affected when one country is affected. This is important because the continent of Europe had become very weak after the wars and they needed to strengthen, and the European Union keeps the countries of Europe strong and economically fit.
United we stand, divided we fall.After being bombed in various parts, ruined economically, politically, and culturally, and shocked after World War 2, Europe decided to make a union/ supranational organization named the EEC (later known as EU(European Union)) consisting of 28 nations.If you are a citizen in one of these territories, then you have some exclusive rights: you can work, travel, retire, study, etc. in any of these 28 nations, plus all of these countries have the same currency, the euro, so you do not have to switch currencies every time you travel.However, some countries such as Norway did not join, because of the fear of losing their sovereignty or control of own affairs and not give up their unique cultures of cuisine ,
The European Union today is a political and economic entity that controls in a single market located mostly in Europe exploiting Euro as a single currency uniting the vast majority of its members. The market that all European Union members share provides free trade of goods and services as well as a common external tariff. One might argue that the European Union would not perceptible its current influence had it not been for the introduction of the Euro. Speaking of the benefits of the Euro, one can name the elimination of exchange rate problems, creation of a single financial market, providing price stability, low interest rates as well as being a political symbol of unity and commitment to the Union. Today, Euro is the second reserve currency in the entire world - a fact that clearly speaks for itself of its value in the global market.
Over the course of sixty years, the European Union (EU) has evolved to become one of the most economically and politically integrated regions in the world. Compare and contrast the EU with one other major global trading bloc, such as NAFTA or ASEAN, with which you are familiar.
Many people would agree that Europe is a continent in which regions identify with each other even if they are not part of the same country. For that reason, as well as others, in 1957 the Treaty of Rome "declared a common European market as a European objective with the aim of increasing economic prosperity and contributing to 'an ever closer union among the peoples of Europe'" (www.euro.ecb.int). Later, in 1986 and then in 1992, the Single European Act and the Treaty of European Union tried to build on the previous treaty to create a system in Europe in which one currency could eventually be used all over the land under the heading of the Economic and Monetary Union. (www.euro.ecb.int) However, the question remains, why would the leaders of various European nations want to create one currency when the rights of national sovereignty have always been an issue for countries all over the world. Why, in 1998 did they create the European Central Bank, and why in "The third stage of EMU... on 1 January 1999, when the exchange rates of the participating currencies were irrevocably set" (www.euro.ecb.int) did eleven, and later twelve, countries link themselves economically in a way that has never been done before?
To start with, what is the meaning of the Single Market? According to European Commission website, Single Market indicates the EU as one territory that has no internal borders or any other controlling complications that lead to the free movement of booth services and goods (The European Single Market - European Commission, 2017). According to the same source, single market has great benefits. It encourages competition and trade, increases efficiency, promotes quality, as well as helps in cutting the prices. In addition, the same source considers the European Single Market as one of the EU’s ultimate accomplishments that powered the economic growth and made the everyday life of European businesses and consumers easier (The European Single Market - European Commission, 2017).
To most people in the United States hearing the word Euro brings about blank stares. Ask this same question in England or another European country and it means bringing Europe together under one common currency. The Euro can be defined as the common monetary system by which the participating members of the European Community will trade. Eleven countries Germany, France, Spain, Portugal, Ireland, Austria, the Netherlands, Belgium, Luxembourg, Finland and Italy will comprise the European Economic Monetary Union that will set a side their national currency and adopt the Euro in 2002. A new National bank, based in Frankfurt Germany, will be constructed and the interest rates that control the economies of these nations will be in the hands of this new system. It is indeed a great experiment, being masterminded in Frankfurt, one that will be felt through out Europe as well as the rest of the world.1
The Presidency rotates among the Member States every six months and is used as a mechanism through which Member States can advance specific priorities. The UK will next hold the Presidency in the second half of 2005. [2] The European Council's far reaching and dramatic decisions have helped propel their meetings into the public spotlight where they have become the focal point for media coverage of the EU, which increases their power [3] During the political, economic and institutional weakening of the European Community (EC) in the 1960s and 1970s the ECJ persisted and struggled on to create an extensive and powerful mass of case law that continued the process for deeper integration. The outcome of this was extremely positive.
Eurozone crisis has had huge impacts not only on the economy of the UE but also on the other countries who have economic and financial relations with the members of the union. The reason why we have decided to examine the Eurozone crisis in detail is to have a better understanding of the mechanisms behind this extremely important and complex problem and also to make accurate inferences about the solution alternatives. In our pape...
Senior, Nello Susan. "Chapters:4,15." The European Union: Economics, Policies and History. London: McGraw-Hill, 2009. Print.
“From time to time it is worth reminding ourselves why twenty-seven European nation states have come together voluntarily to form the partnership that is the European Union.” 1
The recent Global Financial Crisis (GFC) initially began with the collapse of credits and financial markets, which caused by the sub-prime mortgage crisis in the US in 2007. The sub-prime mortgages were given to high-risk lenders (with bad credit history) who were in danger of defaulting, which eventually caused a global credit crunch, where the banks were unwilling to lend to each other. In October 2008, the collapse of the major financial institutions and the crash of stock markets marked the peak of this global economic slowdown (Euromonitor International, 2008).
Risse, T 2003, The Euro between national and European identity, Journal of European Public Policy, Vol. 10, no.4, pp.487-505
The formation of the EU came just over a decade after the Second World War, 1957. For the EU’s originators the EU was a way of reducing national hostility, resentment and competition, which had driven the continent into war. The European Coal and Steel Community began to unite European countries not just economically but politically in order to prolong peace. The member states then consisted of just six, Belgium, France, Germany, Italy, Luxemburg and the Netherlands. Now fifty years in the European Union consists of twenty-seven member states.