...act the huge levels of debt in the periphery countries combined with the investment in the housing sector which was hardly hit by the subprime crisis in the US. Therefore, the financial integration and the trends feeding the imbalances in Europe such as government spending and investment in non-tradable sectors rather than increasing the competitiveness of their exports brought and amplified market uncertainty about the sustainability of periphery countries debt. Solutions to this would be a much stronger financial, fiscal and macroeconomic surveillance mechanisms along with common financial rules for the banking sector. However, the most important step as to avoid such divergences among euro zone countries would be to keep a certain level of imbalances but with a Fiscal Union so as to mutualize problems, and apply a market for Eurobonds as a way of burden sharing.
“The introduction of the euro will represent the most dramatic change in the international monetary system since President Nixon took the dollar off gold in 1971 [and when] the era of flexible exchange rates began…the euro is likely to challenge the position of the dollar [and hence] this may be the most important event in the history of the international monetary system since the dollar took over from the pound the role of dominant currency in World War I” (Mussa 2002).
After the long awaited single currency implementation known as the euro, there have been many ups and downs to this monetary system. Many have been quick to criticize while others still praise its value claiming it will soon be valued strongly against the dollar. Our paper looks into the various aspects of the euro and the progress it has made since its initiation. We begin with a brief history of the euro then move on by raising some questions concerning the effects of the euro on various economic aspects such as competition and global financial institutions. We then provide insight to the various strengths and weaknesses of the euro and the implications this currency has on various institutions such as banks. We conclude the paper by presenting a number of challenges the euro may face in the near future, as well as its current conditions.
Analyzing the process leading up to the euro and the looking at the possible advantages and disadvantages that will result from the new currency are the key issues of this essay. The first section looks at some of the requirements leading up to the euro, including some of the specific fiscal goals required by the EMU regarding prospective members in 1999. The second section looks at some of the economic reasons for European Union countries to adopt the euro, focusing on the elimination of exchange rate fluctuations, increase trade overseas and across borders, and expanding markets for business as some of the advantages of euro currency countries. Price transparency, another advantage of the euro, is the focus for section three. Price transparency is the ability to easily recognize price differences between countries, which was not possible pre-euro. The paper then points on some effects of the euro on American businesses its economy. The updating of financial and accounting IT systems was the main adjustment discussed that U.S. multinationals must deal with. The paper then briefly looks at tourism, and how that industry of Europe is affected by the euro. The paper then looks at the euro introduction from a political standpoint, explaining if the EU goal of “political unity” is actually possible. The essay finally discusses the future of the currency, asking the question “Can the euro survive?”
During the first five years of the existence of the Euro, the average rate of inflation in the euro area has been 2 per cent, which is in line with the ECBâ€™s definition of price stability. Even though inflation has occasionally risen above the 2 per cent ceiling this was a consequence of a number of shocks such as the oil shock. What is important is that these first five years of the euroâ€™s existence, inflation expectations have remained secured to a rate close to or less than, 2 per cent as can be derived form the yields of index-linked long-term bonds.
Despite these benefits, the launch of the Euro has not gone as successfully as planned. Since it’s introduction the Euro has lost almost one third of it’s value compared to the dollar. This devaluation has the potential to create a large negative effect on European markets. To take control of the situation government intervention was deemed necessary.
...ould be difficult to make a case stating that the modern automobile has not had a large effect on our society in more than one way. It has been shown that the automobile has stimulated the economy by creating jobs and being partly responsible for the increase of women in the workforce. The automobile has revolutionized modern manufacturing by advancing techniques and bringing popularity to producing technologies that are meant for the masses rather than the few. The automobile has also sparked worldwide debate on issues involving air pollution and futuristic energy sources. In order for a technology to have a worldwide impact on culture, history, politics, environment and the economy, it must have two characteristics; it must be available and desired by the masses and it must be adaptable. The modern automobile has been proven to have both of these characteristics.
Five years ago, the biggest thing in economic and international news was the introduction of the new European currency, the Euro, into circulation and into the pockets of the consumers of the participating countries within the European Monetary Union. In an attempt to unite Europe and to form a dominant currency to rival the US dollar, Europe locked their exchange rates and went full steam with this plan. Unfortunately, for many of the European countries, what seemed to be the end all for European economics, quickly unraveled the inherent reality of the fundamental macroeconomic flaws in the European monetary system that may cause its downfall and deficit policy that could lead to its utter collapse. Even with this in mind, some speculate that, with the right amount of revision and monitoring, the Euro might actually have a chance of becoming the worlds leading currency. In any cases, however, before looking this far into the future, we must first remember the past.
The European Union cooperation all started with economic integration. Since the beginning of the ECSC in 1952 until now one of the major forces but also one of the major weaknesses of the EU has been their will for a common market and a monetary union. The single market was achieved in 1992 with the entrance into function of the Maastricht treaty. This treaty greatly influenced how states would have to deal with external border control and the free movement of the people because what the Maastricht treaty did was not only opening a single market, but also allowing people, goods and services to move freely across European Union member states. Economic integration has explained by Nevin has usually 5 level which goes from he lowest o he highest level of cooperation. The first level of integration is the preferential tariff which only allows st...
The album sold 700,000 hard copies and was number one on the Billboard 200 within a week’s time. He didn’t live to put the final touches on the album however, the album was the last thing left before Biggie’s death and perfected every single aspect that rappers go through. “Life After Death” has been acclaimed by many music writers in the industry as “one of the seminal mafioso” rap albums. The album was ranked number 476 on Rolling Stone’s 500 greatest albums of all time in 2003. Most of the tracks on the album were written during the feud with Tupac and the album had a wide variety of songs and a lot of diversity in it. “Life After Death” set the record for the quickest and largest jump in the history of Billboard
For over thirty years now a European Monetary Union has belonged to the articulated aims of the European Union. All previous attempt to establish a Monetary Union, such as the so-called “Werner- Plans” in 1979 through the European Monetary System (EMS), failed though. In 2002 the EMU finally was put into full effect. Now that the Euro- countries have experienced three years with the Euro, it is possible to make a preliminary assessment of the Euro.