The Euro has proven to have many advantages for the European Union, putting them on the path for political solidarity. With the Euro comes the elimination of exchange-rate fluctuations, making the fluctuations of currency values across Europe “a thing of the past”. Price transparency is another advantage of the Euro, which makes it easier to tell if the price of a product in one country is different than the price of the same product in another country. This encourages competition between countries, mobilizing economies to grow and compete with each other in different markets. Transaction costs become much less of a burden to tourists and business people alike when they do not have to constantly exchange their currency from another country when traveling within the European Union. This saves both time and money, which encourages more travel between countries for tourists and business men/women.
All of the advantages mentioned so far contribute to the increased trade across borders also. Again, this boosts the economy of the countries within the European Union. With the European Union and it’s currency, the Euro, there is an increased cross-border employment. Businesses are more likely to employ and conduct business across different countries with the introduction of one currency. This means a person could work across the border in another country since the same currency is paid to employees across the European Union. There is an increase in the financial market stability with the introduction of the Euro across many countries as well. One currency means more stability across Europe and the members of the European Union. Inflation rates are decreased, as are the interest rates, to promote the growth of markets in these developing countries. Countries that wanted to become a part of the European Union had to shape up their economies, encouraging a growth in their markets, to keep up with the requirements of being a part of the European Union.
The Euro’s position relative to the U.S. dollar and the potential political and economic consequences in relations between the U.S. and the European Union are very important topics when discussing trade between these nations. First, the Euro is worth 135% of one U.S. dollar. This should make it clear that we have to focus on exporting more of our goods to the European Union and its members rather than buying (importing) more of their goods during this time.
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 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?
Raymond J. Ahearn, John W. Fischer, Charles B. Goldfarb, Charles E. Hanrahan, Walter W. Eubanks, Janice E. Rubin. "European Union–U.S. Trade and Investment Relations: Key Issues." In CRS Report for Congress, 35 pp.: Congressional Research Service, 2008.
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
Travelling and business was made easier since they did not have to exchange currencies, and more importantly, the European trade agreement allowed for currency control to be less risky. For example, before a European citizen would have to identify the market price of a good and then use a currency converter. Since the euro was formed this allowed markets to be more transparent, less risky and more fair competition between member states. This allowed efficiencies and business development
The European Union economic and political union is divided between twenty-eight European countries that united to preserve the economy, of the union. This form of economic preservation allowed “an organization spanning policy areas, from climate, environment, and health to external relations and security, justice and migration” (EU 2018). First, to build the European Union every country within the union avoided conflict by trading goods with one another. The act of courtesy in trade amongst the countries promoted peace and economic growth between the European countries (EU 2018).
By doing this it allows the economies to become more reliable and better able to deal with shocks. Increasing the rate of recovery in output will allow economies to reallocate resources quicker which in the long run will mean less time wasted and more money put into the expansion of growth in said economy. The euro as a whole does not have an independent monetary policy or an independent exchange rate. This is a crucial issue which needs to be looked upon by the government in the near future. Due to this lack of independent structure, it is of vital import that the euro becomes more susceptible to shocks – whether they be large or small – to ensure that the economy remains stable throughout tough economic times. Being a member of the monetary union ensures a “higher degree of resilience” for each participating country. (Praet, 2105) By countries in the EU opting out of this monetary policy it weakens the economy as a whole. It makes countries who participate in this policy more vulnerable to a severe economic downturn due to the fact that they cannot adjust to shocks as quickly. This is due to the “spill over” of unemployment and lack of investments of countries not enforcing said polices. (Praet, 2105)
As of today, there are 28 member states of the European Union. Along with five more countries that have requested acceptance into the EU, but still are waiting to hear the final verdict from the EU . The European Union has many common objectives that enable this supranational entity to fully function on a daily basis, year round. The first of which is strong economic ties to its member states. With strong economic ties in place between each member state, the EU has evolved into not only a continental market, but a massive global market. This was furthered even more with the implementation of the euro in 1999. With the introduction of the euro; trade and travel between countries became more encouraged and streamlined. As well as doing away with monetary exchange rates between countries within the EU . The euro radically changed the way citizens within member states of the European Union conducted themselves, their businesses and their lives.
The theme of this essay outlines two things. One, the key elements of Bretton woods system and second, the characterisation of Bretton woods system by Ruggie as ‘embedded liberalism’, and how far he succeeds in it. The Bretton woods system is widely referred to the international monetary regime, which prevailed from the end of the World War 2 until the early 1970s. After the end of the World War 2, the need of international monetary framework to boost trade and economic; growth and stability, was important. Taking its name from the site of the 1944 conference, attended by all forty-four allied nations; the Bretton Woods system consisted of four key elements. First, to make a system in which each member nation has to fix or peg his currency exchange rate against the gold or U.S. dollar, as the key currency. Secondly, the free exchange of currencies between countries at the established and fixed exchange rate; plus or minus a one-percent margin. Thirdly, to create an institutional forum, so-called International Monetary Fund (IMF), for the international co-operation on money matters: to set up, stabilize, and watch over exchange rates. Fourth, to remove all the existing exchange controls limiting (protectionism) policies by the members, on the use of its currency for international trade. In practice the first scheme, as well as its later development and final demise, were directly dependent on the preferences and policies of its most powerful member, the United States. According to John Gerard Ruggie, 1982, this Bretton woods system of monetary co-operation represented the type of liberalism which characterise “domestic social economic stability along with a liberal trading order.” He referred this system as ‘embed...
As a result of those huge economic and social issues resulting from Eurozone crisis, finding a solution to the currency problem become an urgent as well as a crucial task of the member countries. In order to fix this problem, there were many different proposals submitted by all parties concerned. Policy implementations taken by the European Central Bank have had some powerful impacts on the economy of the union, and therefore the idea concerning a separation within the union has almost disappeared. However, to be able to find an effective and permanent solution it is needed to focus on long term fiscal and monetary policies.[1]
The creation and adoption of the Euro by the EU was a major economic decision that still affects world economies today. The currency of the Euro was first used on January 1st, 1991. This became the new currency for the EU except for the UK, Sweden and Denmark.
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...
There is one thing that differentiates the international business with the domestic business where it uses more than one currency in the commercial transaction. For example, if a company from British purchases some goods from a company from US, the international transaction will require for exchanging pounds and U.S. dollars which involve the foreign exchange market. In the foreign exchange market, any country that wish to do business with foreign country, the country need to convert their domestic currency into the foreign currency that they are wish to cooperate with through foreign exchange.