European Economic Monetary Union
Introduction
Any country maintaining its currency will always have the advantage of meeting its compulsions, which are in its currency, without some limit. Besides, own currency enables a nation to be independent in terms of policy formulations. On the other hand, a nation maintaining its currency is likely to daunt its tourism sector. This is because the tourists visiting the country would have to change money while traveling from their countries, as opposed to using a universal currency, for instance within the euro zone (Grauwe, 2014). The tourists would encounter more red tape when shifting large amounts of money across borders. Besides, travelers will be forced to change currency and pay banks huge commission charges. Since the disadvantages outweigh the advantages, it is prudent for countries to form monetary unions
History of EMU and Euro
The first attempts to form a European Economic and Monetary Union started after World War I. This idea was proposed by Gustav Stresemann, on September 9, 1929, during one
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For instance, it resulted in loss of economic sovereignty. Once a country became a member of the eurozone, the National Central Banks together with the Bank of England lost their ability to utilize interest rate guidelines to achieve sovereign macroeconomic objectives (James, 2012). Due to the global recession and financial crisis, recession-hit countries such as Greece were not able to reduce interest rates unilaterally. Besides, many European countries have not been able to unite fully with the euro area due to difficulty in convergence. In the UK, for instance, convergence is not easy because of the exclusivity of its financial services sector and housing market and due to the closeness of its trade cycle to that of the USA. Besides, the UK’s labor market is extremely flexible in comparison with, France, and Spain, and this makes convergence difficult
The benefits of the European Union outweigh the costs. Ever since the end of World War II, countries in the EU have been helped economically, politically, and culturally.
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.
The Federal Reserve (Fed) creates and manages some of the most important economics policies in the world. Its current chairman, Janet Yellen is considered one of the most powerful people in the world because of the decisions she over sees. One of the biggest decisions that Federal Reserve has to make is what to do with the short-term interest rate. To comprehend that question one must look in to the two factors that go in that decision. Those to factors are referred to as the dual mandate. So what exactly does the dual mandate entail of?
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.
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).
For example, during the last several weeks in defiance of the treaty. Britain lowered its interest rates while Germany raised theirs. Both to accommodate their own separate economies. This sort of unity does not. seem to me to set an example from which to abide by in the future.
The Greek economy has seen a large collapse following the recent worldwide recession. The European Union has expressed concerns for the impact that Greece’s economic collapse will negatively affect other member nations. Greece and the European Union are working to reduce the Greek deficit and to contain the economic crisis to Greece.
Eurozone crisis can be seen as the most important economic problem of the European Union in the history. Because of that crisis the currency union have faced the possibility of separation which is an extremely critical issue not only economically but also politically. Until the subprime crisis which became prominent by the bankruptcy of Lehman Brothers in 2008, the economic level of the EU members were similar. When the bankruptcy occurred those countries started to differentiate in a very significant way. Total government debt and also problems of banking sector lead many countries to negative GDP growth, high unemployment rates and more importantly social unrest.
Besides, the right to specialist brings the right to join in some level of business area a free market plan that unites exchanging with the embellishments of one's decision, paying gratefulness to national edge.
Senior, Nello Susan. "Chapters:4,15." The European Union: Economics, Policies and History. London: McGraw-Hill, 2009. Print.
A market economy is a society that is industrialized. For example, there are factories and workers that make goods. But a society does not need capitalism to be industrialized. A market economy is where there are people who compete. They try to get money by themselves and only for them. They are money greedy and the want it all. This is a goal and this is what a market economy focuses on. But even though society is industrialized, they have limits. They are controlled by the government. For example, Social Security is controlled by the government. When the government controls, institutions do not have many rights. For social security, there are qualifications and these qualifications are made by the government. But the poor face more problems than the rich. For example, the rich have more power and control the ways there
Cameron succeeded in getting a new deal on the UK membership of the European Union, but the decision whether to leave was up to the citizens and thereby leaving the government without much control. The exit of the UK seems to challenge the idea of “integration” and brings the concept of disintegration into the picture, which Liberal Intergovernmentalism then would have to be able to account for. Due to the scope of this paper I will only briefly touch upon disintegration and how Liberal Intergovernmentalism deals with UK’s divorce with the European Union. According to Ben Rosamond (2016), UK leaving the European Union has provoked speculations about a possible disintegration of Europe (Rosamond, 2016: 865).
Functionalism: The discord that interest in one reach, (for instance, trade) pushes coordinated effort in distinctive extents. In principle, the pills issue, movement issues, et cetera are all tended to fortnightly
The first reason is the issue of euro. Considering a strong correlation between money and collective national identity, money can be used as an effective tool in facilitating the integration of diverse identities (Risse, 2003). Actually, the principal goal of the issues of euro is to promote the unification of the monetary system and foster integration of the economy in order to ease economic activities betwee...