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.
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]
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
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...
As mentioned before, the EU is the first of its kind; therefore it is natural for there to be some issues. The first major issue of the EU is its legitimacy. The European Union “still lacks widespread support and legitimacy among the citizens of Europe”. (page 315) This could be caused by the “democratic deficit “that has formed in the EU. The European Union is often blamed for having its institutions and operations too remote and “inaccessible to ordinary citizens”(315). The voter turnouts at for the last European parliament elections on saw “43 percent of eligible voters casting a ballot”(315), the lowest ever. This movement has been labelled “Euro-scepticism”, which is described as an opposition to the process of Europe’s integration. According to the BBC, Eurosceptics in the EU’s parliament have more than “doubled their representation [as] about one-third of the 751 MEPs are Eurosceptic” (http://www.bbc.com/news/world-europe-28107633). One major reason for this “Eurosceptic” movement is the economic issues that presented themselves during the 2009 and the 2011 recession. Europe, like the United States, was hit especially hard by this crisis and many flaws in the EU’s economical system were brought forth. The major issue resided with the common currency of the Euro. Countries with weak economies could not print more money to “devalue their currency to pay their debts and make their exports more competitive”. As the German economy was still “functioning reasonably well, the value of the Euro did not drop sufficiently to give a boost to the weaker economies in southern Europe”(314). This caused countries like Greece and Spain to be bailed out by the European Central Bank, but in return were forced to impose strict austerity measures which led to “soaring unemployment rates reaching over 25%” (314) . Riots