Advantages And Disadvantages Of European Union

European Central Bank is like the US’s Federal Reserve System. Federal Reserve is the central banking system of the United States. It was formed on December 23, 1913, with the presentation of the Federal Reserve Act in reaction to a series of financial that displayed the need for central control of the financial structure.

Initially envisioned as a confederation of member states collaborating together for mutual benefit, the EU and its 27 member nations established a single integrated market with the goal of facilitating trade and international commerce. With the introduction of the Euro across the Eurozone, this monetary system has proven to be unsustainable given the region's traditional reliance on entitlement programs and social assistance. With federal budgets stretched to their limit, "the debt crisis has already spread through Greece, Ireland and Portugal, all of which have

The choice for the European Union to adopt a single currency for the European Community was first introduced in the 1970 Werner Report. This idea was then developed into the European Monetary System (EMS). The Maastricht Treaty (1992) made EMU part of EU law and set out a plan for a single currency to be established by 1999 . It was thought that a common currency would increase efficiency in the EU, thereby raising the standard of living and develop a sense of European Identity. It was agreed that in order to adopt the single currency, EU members had to meet certain conditions. The conditions include to keep their exchange rates within bands called the Exchange Rate Mechanism (ERM), have low interest rates and low inflation and keep government spending and borrowing under control. In 1998, 11 member states had agreed to fix their exchange rates where the European Central Bank would take over and have the power to change their interest rates. The single currency is now, in 2016, is shared by 19 member states.

Having met the euro convergence criteria in 19982, the governments of 11 European sovereignties began plans for the transition with Greece and seven other EU member states being admitted to the single currency area in later years. This process originated during the February of 1992, when the Maastricht Treaty was signed by the existing members of the European Economic Community (EEC). The aim of this treaty, signed in Maastricht, Netherlands was to ensure that 'sound fiscal policies ' were retained by the member states of the European Union. With the signing of the Treaty, a new regulation is now imposed which declares any state newly ascended to the EU must join the Eurozone once 2 years of ‘turmoil-free’ years have been completed and the convergence criteria are met. This meant that after the Treaty was actually enforced new states have become pressured to meet the convergence criteria by any means possible.

The United States and the euro area are the top two largest economies in the world. This paper is a brief comparison of the central banking systems of the two economies. The paper starts by introducing historical background for the two central banking systems to be established. It then continues to analysis similarities and differences between two central bank system’s organizational structures. Moreover, the paper will also compare monetary policy frameworks of the two systems in terms of monetary policy making organization, objective, transparency, accountability, and strategies.

The euro zone which is officially called the "euro area" consists of 17 countries. In other words, it consists of countries which are also part of the European Union. The European Union consists of approximately 27 member states. For a country to be a member of the euro zone it is necessary for it to be a member of the European Union. A single currency was introduced as a result of European union reforms and the currency was named as the "Euro". Those countries which adopted the Euro as their currency by giving up their local currencies became the member states of the Euro Zones. These countries include: Austria, Belgium, Estonia, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

The introduction of a social and economic grouping is often to create a single market, such as was the case with the EU and NAFTA. The European Union is an economic and political union of 27 member states which are located in Europe – its roots are with the EEC which was formed in 1957. The European Union was fully established when the Maastricht Treaty came into force on 1st November 1993. The original objective of the EU was to create such single market, so that there was the free circulation of goods,

As the most principle stance in EU monetary architectures, the EMU has experienced an incredible institutional transformation under the tremendous pressures not matter from the EU or national levels. In Dyson’s (2000) observation, the EMU’s actual effects on European states began from 1 January 1999. However, the process for putting its conditions in place can be traced to the European Monetary System (EMS) in 1979, since when the specific

There are more scholarly arguments why EU has achieved economic integration. EU is considered as the largest economy in the world, the reason behind that is that EU quality and technical standards are far higher than the other states and even the US. EU marketplace is also superior in terms of quality since their standard is the benchmark for other countries if they want to sell their products internationally. EU is pioneer in creating automobile and some engineering products too. Moreover, EU has own externally directed investment wherein it export more capital in China than in US and it also gives more development assistance in other countries which still make its economic power superior and its integration

The European Union is the economic and political union, which consists of 28 democratic European countries: Austria, Belgium, Bulgaria, Cyprus, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and United Kingdom. It is based on the principles of freedom, democracy, respect of the rights and general freedom of people, as well as on the principles of the constitutional state, which are shared within the country-members. This union is considered the most developed intergovernmental organization regarding to its power, effectiveness, and capacity to influence. Although, all those members

In 1999 seventeen countries in the European Union adopted the Euro forming a Euro Area. With the adoption of the Euro these seventeen countries discontinued their old currencies and monetary policies. Monetary Policies

European monetary union is based on the assumptions of presence of fixed exchange rate, free movement of capital and coordinate monetary policy. Fixed exchange rates are preferred by producers and consumers of the European economy, since the economy becomes more predictable. In such market conditions, it is easier to foresee the future and plan the actions that are to be taken up in the future. The second assumption - free movement of capital - is crucial for optimizing the use of capital and for enlarging the benefits that come from it. The third assumption is coordinate monetary policy; its role is vital in creating monetary union, since it ensures that the countries participating in the union have the same aims and together strive to

The European Union (EU) is the union of economic, monetary and political with twenty-seven Member States. They work together, in order to get particular advantages for their countries. This has been argued by Bickerton, the shift from nation-states to Member States led to a subtle and not unproblematic. However, the countries are free to choose want to join or withdraw from the EU. EU consists of various institutions, but with only three institutions are involved in the EU legislative process. These are the Council, the European Parliament and the European Commission. Over the years the EU has been expanded, consequently various treaties have been signed to work together. The latest treaty is the Lisbon Treaty, which was an

European Union is a political and economics organization,which consist of 28 countries.It was established by 6 European Countries.The UK joined to EU 1 January 1973 with Denmark and Ireland.EU provides freedom movement of people services capital with standart legislation for member countries.All of these standarts could lead to opportunities such as,free movement.competitive trading(www.europa.eu-official website of EU).According to the official website ‘The EU’s economy measured in terms of goods and services(GDP:Gross Domestic Product) is now bigger than US’s:EU GDP in 2012 (i.b.i.d).All of positive features of EU,nevertheless Currently,It is loudly discussed to withdraw EU in the UK as Prime Minister David Cameron said in 2013 (newspapers).

The European Monetary Institute was established in 1994 as an intermediary to create the European Central Bank (ECB) and a common currency for the member nations. The ECB, working since 1998, holds the responsibility of arranging and implementing a distinct monetary policy and interest rate for the espousing nations in union with their national central banks. The member nations including "Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain" ("European Monetary System," 2009) have incised their interest rates to an almost homogeneously near to the ground level since 1998. They did so in order to encourage development