European Economic Community Essay

European Economic Community Essay

Length: 1478 words (4.2 double-spaced pages)

Rating: Powerful Essays

Open Document

Essay Preview

From the late 1960’s onwards, international currency markets became increasingly volatile. The early part of the next decade brought the oil crises and further fluctuations, leading to attempts by European leaders to achieve monetary stability. The objective of the European Economic Community was to achieve an economic and monetary union by 1980, for closer economic and political integration. In 1979, however, the Member States (excluding the United Kingdom) created instead the European Monetary System (EMS), in order to attain stability in exchange rates and thus growth and stability in their economies. Under this new system, member countries harmonized monetary policies; through the use of an Exchange Rate Mechanism (ERM), the currencies of the eight states were only allowed to fluctuate by a certain amount, within a narrow band of 2.25% above or below the central rate. A new European Currency Unit (ECU) was introduced, consisting of a currency basket of a weighted average of members’ currencies. Each member country was to contribute reserves to a common fund, to support the system in case a currency became ‘divergent’. The system was very similar to the European “Snake”, which began in 1972. Ireland, whilst undecided whether it was a good idea to break the link with the Pound Sterling for a time, chose to join the EMS, and hence the ERM, from the beginning. The UK, on the other hand, were wary of joining at first and delayed entry of the Sterling until 1990, only to leave two years later, on 16 September, or “Black Wednesday”, following increasing unsustainable pressure on their currency. The two governments essentially chose to join the ESM under the impression that the currency stability it promised, through coordinated mo...


... middle of paper ...


...ve the disadvantage in that, no matter which option they go for, they will always experience more volatility than larger economies, and so must make wise fiscal policy decisions (Breedon, Pétursson and Rose, 2011).


Figure 1 - Source Central Bank (http://www.centralbank.ie/polstats/stats/exrates/Pages/default.aspx)

Figure 2 - Inflation Source CSO (http://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/saveselections.asp)

Bibliography:
http://www.nber.org/chapters/c11295.pdf
http://www.margaretthatcher.org/archive/EMS_1978.asp
http://www.centralbank.ie/publications/Documents/2003%20Spring%20-%20Signed%20Article%20-%20The%20Irish%20Pound%20-%20From%20Origins%20to%20EMU.pdf
http://news.bbc.co.uk/2/hi/business/2259648.stm
http://www.jstor.org.jproxy.nuim.ie/stable/20081498?seq=1&__redirected
http://webir.tcd.ie/bitstream/2262/64276/1/25%20apr%2094%20honohan.pdf



Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

The European Union And The Union Of A Free Trade Market Essay

- Intro: Few groups have changed the course of history, as well as the present, as influentially as the European Union. Along with guidelines, protocols, and institutional changes, the European Union has undergone many changes including quite an extensive name transformation. Starting with the name European Coal and Steel Community, designed by Robert Schuman, with intentions of promoting economic integration and the prevention of war between member nations. Next, the name evolved into the European Economic Community, later shorted to European Community when absorbed into the European Union, with its sights set on further integration with emphasis of customs union and the establishment of a...   [tags: European Union, European Economic Community]

Powerful Essays
1194 words (3.4 pages)

Essay about Major Events That Can Alter The Course Of The European Union

- Minor bureaucratic conflicts can often escalate into major events that can alter the course of the European Union (EU). Neo-functionalism has been one of the main focal arguments for enhancing where states give up their sovereignty and national interest in order to share the benefits of the EU project. However, the crisis during 1963, where integration efforts stalled, paved way for intergovernmentalist thought where scholars, such as Hoffman, argues that the national interest and sovereignty of individual member states had not been diminished (D’erman “Hoffman’s Intergovernmentalism”)....   [tags: European Union, European Economic Community]

Powerful Essays
805 words (2.3 pages)

The Legal Role Of The European Union Essay

- “Reality is one of the possibilities I cannot afford to ignore.”-Leonard Cohen In October of 2015 the Law and Justice Party of Poland was swept into government and subsequently noted to be the first party in Poland to win an absolute majority in parliament since the country held its first democratic elections in 1991. The Law and Justice Party’s (LJP) platform sought to address the growing uneasiness of the seemingly “left-behind” working class and agriculture sector in the country many felt was struggling to compete in an increasingly globalized world....   [tags: European Union, European Economic Community]

Powerful Essays
900 words (2.6 pages)

Impact Of European Construction On The United Kingdom Essay

- Since a few years, the euroskepticism is growing and could possibly damage the dynamics of European construction, introduced in the 1950s. The national parties are sometimes led to call upon Europe in the national political debate. During the last European elections in 2014 UKIP in the United Kingdom, and its the website showed the Union Jack burning in its center, revealing the 12-star European flag, with as a comment: " who really rules this country. ". In the same vein, the National Front in France (2014) staged Marianne, symbol of the French Republic, with a black eye, saying " Europe hurts "....   [tags: European Union, European Economic Community]

Powerful Essays
842 words (2.4 pages)

Essay on The Union Of The European Union

- Many things are happening locally as well as internationally that catches our everyday eye. Brittan’s recent results from a referendum that was held to decide if they should leave the European Union is one of these events. As a result of the feeling of lost power and control, the citizens of Britain voted to leave the European Union in hopes of industrial reform. The European Union, made up of 28 countries, has four main parts that handled different aspects of Europe as a whole. The European commission is run by 28 commissioners, one from each member country....   [tags: European Union, European Economic Community]

Powerful Essays
871 words (2.5 pages)

European economic community Essay

- Britain's entry into the European Economic Community was a source of great conflict in Europe. There were suspicions that French President de Gaulle did not want Britain to enter in order to maintain his country's hegemony over the EEC. De Gaulle spoke of the cultural and institutional differences that would make Britain incompatible with the Six. The British governments motives were even questioned as to whether they only wanted to reap the economic benefits of the EEC. The following is my assessment of these situations according to the Salmon documents....   [tags: essays research papers]

Free Essays
871 words (2.5 pages)

Essay on The European Economic Community and the Euro Dollar

- The European Economic Community and the Euro Dollar The European Economic Community (EEC), also known as the common market, was established in 1957 through the treaty of Rome signed between Belgium, France, Italy, Luxembourg, the Netherlands, and Germany in order to achieve economic cooperation. "It has since worked for the free movement of labor and capital, the abolition of trusts and cartels, and the development of joint and reciprocal policies on labor, social welfare, agriculture, transport, and foreign trade." Over the years, monetary union has been suggested by the members of the EEC and was finally attained on January 1,1999 when eleven European countries, which are now collecti...   [tags: Papers]

Powerful Essays
2727 words (7.8 pages)

Sources Of The English Legal System Essay examples

- In this essay, i will list four kind of sources of the English Legal System according to their constitutional importance and give some cases of each source. Parliament is responsible for creating most of the law applicable in the UK. Such law is contained in Acts of Parliament or Statutes. Increasingly, the content of much of this law is determined by the European Union, and in this respect Parliament does not have complete independence. Since the Human Rights Act 1998, the European Convention on Human Rights is directly enforceable in English courts.(textbook, p18) Parliament ==[S1The English legal system also governed by legislation, which is the formal enactment by Parliament of certain...   [tags: European Union, European Economic Community]

Powerful Essays
1010 words (2.9 pages)

Theories of European Integration Essay

- The European Union (EU) has ever expanded since its initial origin phases/stages of the European Coal and Steel Community (ECSC) in 1951 and the European Economic Community (EEC) in 1958 by the Inner Six countries (Belgium, France, Germany, Italy, Luxembourg and Netherlands). Since its origins, the EU has integrated a substantial number of member-states to twenty-eight and are currently under the accession process some other countries eagerly waiting to join the European Union’s already large family....   [tags: steel community, economic community]

Powerful Essays
1699 words (4.9 pages)

Essay about European Economics : European Economic Monetary Union

- 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)....   [tags: European Union, Euro, European Central Bank]

Powerful Essays
1183 words (3.4 pages)