The Euro-zone is an economic and monetary union (EMU), comprised 17 European Union (EU) member states, which have all adopted the Euro as their common currency and sole legal tender. Within the zone, monetary policies are the responsibility of the European Central Bank (ECB), governed by a president with a board, comprised national central banks leaders. Fiscal policy is less centralized, but restricted by the previously agreed upon rules within the Broad Economic Policy Guidelines. These guidelines set individual national limits on deficits and national debt - Fiscal Commitments (European Council 2011).
In the early 2000s the euro grew in appeal for many reasons: euro-zone was similar to the U.S. economy in relations to trade openness and GDP, the region was able to keep inflation under control and never experienced external debt or current account deficit like the United States. This favored the euro against the dollar. (Nesvisky, 2005). Many experts thought the euro was inevitably the rival to the dollar and would eventually take over the the reserve currency. The thought was not if, but when this would happen.
By 2005 many central banks were beginning to diversify away from the dollar and began to hold more Euros; by the end of 2006 the total number of Euros in circulation exceeded dollars by 75 billion, further evidence of its gaining strength (EconEdge, 2007). In addition, a study by several economists revealed that the reserve currency is basically the one that more countries peg their own currency to and could easily transition to the euro on the condition that most countries would soon begin to manage their currencies with respect to the euro instead of the dollar. These results were based on examining the currencie...
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...ureau of Economic Research. Retrieved from http://www.nber.org/digest/feb07/w12333 html
Stewart, Heather. (2012). Euro Crisis spreads and puts the world economy at risk. The Observer.
Washington, R.A. (2013, April). What Success looks like. The Economist. Retrieved from http://www.economist.com/blogs/freeexchange/2013/04/euro-crisis-3
Could the Euro Replace the Dollar as the World's Reserve Currency. (2007). The Economic Edge.
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European Council. (2011). European Council Conclusions. Retrieved from http://www.european- council.europa.eu/council-meetings/conclusions/
The John Buckle Center. (2012). Discussion of the Crisis in Europe. Retrieved from http://www.johnbucklecentre.org.uk/opensite/wdnews/news.php?xnewsaction=fullnews&newsarch=06201 2&newsid=31
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 Common Market is the third level of trade blocs. This has features of the Customs Union plus free movement of capital and labour and some policy harmonisation such as similar trade policies to prevent certain member countries having an unfair advantage. The European Union is an example of a Common Market and is an economic and political partnership that involves 28 European countries. It allows goods and people to be moved around and has its own currency, the euro, which is used by nineteen of the member countries (The UK excluded). It also has its own parliament and sets rules in a wide range of areas such as transport,... ...
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).
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
Cabral, R. (2013). A perspective on the symptoms and causes of the financial crisis. Journal of Banking & Finance, 37, 103-117
The EU is a union of sovereign European states who share sovereignty based on treaty. The union also possesses competences in policy sectors with exclusive jurisdiction in the area of Economic and Monetary Union while others are shared with Member States (MS), the other powers belong to MS as derived from the conferral of powers art 5(2) TEU, 2(1) TFEU art.3 & 4 TFEU additionally other powers have been offered by the decisions of the European Court for direct effect on citizens
Weiss, M.A. (2009) ‘The Global Financial Crisis: The Role of the International Monetary Fund’, CRS Report for Congress.
Walker, Bruce. "Euro Likely to Keep Losing Value." The New American. The New American Magazine, 7 July 2010. Web. 23 May 2011. .
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 enlargement of the European Union (EU) in 2004 and 2007 has been termed as the largest single expansion of the EU with a total of 12 new member states – bringing the number of members to 27 – and more than 77 million citizens joining the Commission (Murphy 2006, Neueder 2003, Ross 2011). A majority of the new member states in this enlargement are from the eastern part of the continent and were countries that had just emerged from communist economies (EC 2009, Ross 2011), although overall, the enlargement also saw new member states from very different economic, social and political compared to that of the old member states (EC 2009, Ross 2011). This enlargement was also a historical significance in European history, for it saw the reunification of Europe since the Cold War in a world of increasing globalization (EC 2009, Mulle et al. 2013, Ross 2011). For that, overall, this enlargement is considered by many to have been a great success for the EU and its citizens but it is not without its problems and challenges (EC 2009, Mulle et al. 2013, Ross 2011). This essay will thus examine the impact of the 2004/2007 enlargements from two perspectives: firstly, the impact of the enlargements on the EU as a whole, and thereafter, how the enlargements have affected the new member states that were acceded during the 2004/2007 periods. Included in the essay will be the extent of their integration into the EU and how being a part of the Commission has contributed to their development as nation states. Following that, this essay will then evaluate the overall success of the enlargement process and whether the EU or the new member states have both benefited from the accessions or whether the enlargement has only proven advantageous to one th...
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...
Various studies have scrutinised the overall impact of Brexit including the implications for jobs prospect, the effects on the public finances , its influence on the UK and also the possible risk it imposes on global economy. In conjunction with that, a plethora of analyses have also been attempted to quantify the economic impact Brexit primarily have on the UK , its region and also the rest the world. UK’s departure from the European Union , informally known as Brexit , bears an unswerving capacity to cut across the broad prism of economic constructs in both regional and global levels despite the wider claims that mentioned it is a risky step toward regional destabilization as EU loses its second largest
Warwick J. McKibbin, and Andrew Stoeckel. “The Global Financial Crisis: Causes and Consequences.” Lowy Institute for International Policy 2.09 (2009): 1. PDF file.