History of the Euro

In this essay, the author

• Analyzes how the paper looks into the various aspects of the euro and the progress it has made since its initiation.
• Opines that the euro has been the new currency in europe and its neighboring countries.
• Explains the motivation behind the euro, which is to enable a market that more and more looks like one european market.

• Analyzes how the paper looks into the various aspects of the euro and the progress it has made since its initiation.
• Opines that the euro has been the new currency in europe and its neighboring countries.
• Explains the motivation behind the euro, which is to enable a market that more and more looks like one european market.
• Explains that the european monetary system (ems) was introduced on march 13, 1979. the emi was based on the average behavior of the participating countries.
• Explains that the goal of eliminating restrictions on the movement of capital between member states was never achieved. they were on their way to forming a monetary union.
• Explains that the european monetary institute (emi) was a precursor to the proposed european central bank (ecb). the emi monitors the member countries to see if they have met all the qualifications to enter the new union.
• Opines that the ecu has not devalued against any other member country.
• Explains that price stability is defined as having a rate of inflation of the inflation rate.
• Describes the definition of a government deficit that is not "excessive".
• Explains that the emi was translated into a european central bank (ecb) and some countries converted existing debt to euros during the three-year transition period.
• Explains that there are eight different coins that have been circulated, in denominations of €2, €1, 50 cent, 20 cent and 10 cent. the common side of the coin is for each country's symbol of choice.
• Explains that there are seven different notes that have been circulated. they are in denominations of €500, €200, and €100. the notes are different from the coins in that both sides are common.
• Explains that the euro is going to have a profound effect on the european economy along with the global economy.
• Explains the effects of the euro on competition. organizations who started early with their changes had a competitive advantage because they could avoid currency exchange fees and avoid the risk of currency swap positions.
• Opines that the introduction of the euro is a quantum leap forwards in european integration and the most profound change in the international monetary system since the bretton woods system in 1973.
• Explains that the us dollar is the dominant investment currency in the global capital market. the use of international bank assets and liabilities is similar to the breakup of bonds and notes.
• Opines that the introduction of the euro in 1999 will spur a fundamental overhaul of europe's bond market. bond yields have been affected as currency risk is eliminated.
• Opines that the euro is performing a positive transformation for europe's currency regime. many felt that it would present too much confusion and fluctuation.
• Opines that the euro has many strengths as a single currency, and that it could have positive implications for the global financial system.
• Explains that the euro has high expectations for success and if these expectations are not met, the idea of a single currency will be bashed.
• Explains that with the introduction of the euro, the international financial system is now divided into two principal zones, which raises questions of substance regarding movements in the euro-dollar exchange rate.
• Explains that the dollar zone and the euro zone are both huge and essentially closed; most trade is within the zone itself. since currency movements have less impact internally, ities may have a tendency towards neglect.
• Opines that the european investment bank is a good example of institutional support for the relatively young currency.
• Opines that some of the developments suggested above might put upward pressure on the euro, but there are forces working in the opposite direction as well.
• Explains that the pursuit of domestic price stability by the ecb means that it cannot at the same time pursue some other objective, such as exchange rate stabilization.
• Opines that the introduction of the euro raises further questions about international financial cooperation.
• Opines that the answer to many of these questions is far off in the future. international financial cooperation must take place on a truly global scale with the involvement of all countries of systemic significance.
• Opines that the untested european money has yet to establish itself as a quality brand among world currencies.
• Explains that the euro traded as $1.17 and then started a long slide. it hit an 83-cent low last year and recently hovered around 90 cents.
• Explains that the u.s. economy has been growing faster than europe's since the last american recession ended in 1991 and the trend has made investments in the us more attractive.
• Explains that the dollar is the currency of an monolingual economy with a strong government and an authoritative central bank under tried and trusted federal reserve chairman mr. alan greenspan.
• Explains that the european central bank (ecb) is independent of any political authority and free to make monetary policy as it sees fit.
• Opines that duisenberg has yet to get rid of a perception among u.s. investors that he focuses too much on price stability and not enough on growth.
• Explains that u.s. doubts about euro stability were reflected in fortune magazine analysis, which described the complex system of running the eu as a "precarious way to run the world's second-largest economy".
• Opines that the euro zone remains a patchwork of different politics and cultures.
• Explains mr. greenspan's forecast that the dollar would remain a more attractive international currency.
• Explains that the economist disputed his conclusions about productivity during the 1990s, arguing that if one takes gdp per hour worked, american productivity rose by an annual average of 1.6% in the 10 years to 2000, while euro-zone productivity increased by 1.9%.
• Explains that mr. greenspan blamed the pro-labor culture of europe as one of the reasons why european firms could not downsize and increase productivity as readily as in the u.s.
• Explains that regulatory arguments and legal differences across borders have hampered equity trading and securities lending, all promoting one to conclude initial expectations that the euro would replace the dollar were "probably overstated."
• Explains that the dollar has been sustained in value by the preference of institutional investors in the euro zone for dividing their portfolios between europe and the us. this interest benefits both currencies as well as investors.
• Explains that a euro-denominated bond market rivaling that of the u.s. has already emerged, despite the financial-market disruption caused by the events of 11 september.
• Opines that if it helps make europe a stronger, more competitive economy with takeovers and mergers, it will benefit everyone and give the u.s.
• Explains that the ecb has cut the euro region growth forecast for next year from a high of 3.1 per cent.
• Opines that the euro will expand its reach throughout europe and solidify itself as a universal currency.
• Explains that there are currently 18 applicants working toward membership into euroland, including bulgaria, latvia, lithuania, romania, slovakia, estonia, hungary, poland, slovenia, the czech republic, cyprus, malta, turkey, croatia, ukraine, russia, georgia, and switzerland.
• Opines that the euro hopes to create the potential and future of a currency unlike any other. but before this reality is realized, confidence needs to be achieved outside the boundaries of euroland.
• Opines that only time will tell whether or not the euro progresses as planned.
• Describes the process of bank marriage, whereby a merger is accomplished in order to create stronger and more profitable firms.
• Describes the bretton wood agreement, which set a fixed exchange rate for major currencies and established the imf.
• Describes the economic and monetary union (emu) as the latest effort to unite europe economically and politically since the collapse of bretton woods system in the early 1970's.
• Explains that the euro is divided into 100 cents and replaces the european currency unit of ecu.
• Explains eurodollars are american dollars held by foreign institutions outside the united states, usually a bank in europe.
• Explains the term euroland, which is used to describe the 11 countries that use the euro currency.
• Explains that the ecb is the european form of the federal reserve in the u.s.
• Explains exchange rate as the ratio at which the principal unit of two currencies may be traded.
• Explains that the international monetary fund (imf) is an international organization of 183 member countries, established to promote international monetary cooperation, exchange stability, and orderly exchange arrangement, to foster economic growth and high levels of employment.
• Explains the maastricht treaty, which officially created the eu, strengthened the parliament, called for the creation of an eu central bank (by 1999) and a common currency.
• Explains that secretary of state george c. marshall first called for american assistance in restoring the economic infrastructure of europe. the truman administration proposed legislation to restore european agricultural and industrial productivity.
• Describes the monetary- of or relating to money or to the mechanisms by which it is supplied to and circulate in the economy.
• Explains the term securitization, which is used to consolidate mortgage loans and sell securities for resale to the public.
• Explains that the stability and growth pact monitors and assesses the economic policies of member states, with special emphasis on the budgetary position.