How The European Monetary System Works

1861 Words Nov 30th, 2014 8 Pages
Introduction It is important to understand how the European Monetary System works, because the world is becoming highly globalized. Not only are businesses using trade, but consumers are dabbling into the consideration of buying products straight from other countries. Knowing how Europe’s currency, political and economic system works can help other countries better participate in trade. But because of the size of the European Union, it has become a difficult task to bring all those European nations to operate in unison. Europe is made up of more than 30 countries that have even more varieties of different cultures. Bringing these different cultures and systems together has been a long process over time that is continuing to develop. The future livelihood of Europe and its monetary system is important not only for Europe but for those countries who trade with Europe. The main reason for creating this union between the European countries is to increase their rank for international competitiveness. Back in the 80s the European nations realized that in the long run the major national economies alone would not be able to compete against heavy drivers like the United States, Japan, and China. Realizing this disadvantage, a plan for economic integration was formed. European integration purpose was to chance to cause significant economic growth in the member countries by lifting all barriers like custom controls, restrictions on trade, and restrictions on movement of…
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