New Year 's Day 1999 The Euro

The Euro and its Impact on the U.S. Economy The euro is the official currency of the following 12 European nations: Belgium, Germany, Greece, Spain, France, Luxembourg, Ireland, Italy, The Netherlands, Austria, Portugal, and Finland. Although it has been the official currency since January 1,1999 it became physical tender which can be used by all participating countries on January 1,2002. The introduction of the euro into the world was truly a historic event; it represented a unity never before seen in the history of Europe, a common currency. After years of negotiations and much skepticism from around the globe, the implementation of the euro is no longer an abstract ideal, but a change that nations, corporations, and investors must

What the Euro experience has taught us is that even countries which are not vastly different from each other in terms of economic health, can face a phenomenal crisis within just 10 years of the creation of the single union. How then would you expect a global currency encompassing countries with vastly different structures, in vastly different stages of growth and using vastly different means of managing their economies to be stable?

As of 2012, only seventeen of members of the European Union have decided to use Euros as their currency. In order for the members that adopted the Euro as their currency to successfully help their economic problems, the Eurozone members had to follow strict instructions put into place the European Union. The strict policies included strict control over inflation, government debt, and long-term interest rates (Mckee 525). The union put these strict policies into place to give the union the tools that it needed to take in order to help fix the economic crisis in each country participating in the Eurozone. Without the full cooperation of each country, it could cause the plans to fix the economic crisis within each country to fail because of the different interests by each individual country.

The EU sought to simplify trade within European neighbors and to replace national currencies with a single shared currency that could compete with the dollar on the global stage. The members of the newly-formed European Union agreed to a fixed currency conversion rate when the Euro was adopted (Scheller). Initially, the EU only had 11 members, but membership has since grown to 25 member nations. These 25 member countries operate within what is called the Eurozone, over which the European Central Bank sets economic policy

In Europe, the single currency created additional problems because of overvalued exchange rates, and high bond yields.” (Pettinger, 2013).

Optimum currency union is a theory published by Mundell in 1961, the theory is used to debate is a certain area has the requirements to become a currency union, one of the final stages in economic integration, in which a monetary unions benefits compensate the costs.

Many foreign as well as Greek economists of the time warned that the existing economic system needed to be repaired, and that the change to the Euro would only delay the inevitable outcome. I remember watching the news and noticing that there were demonstrations by Greek citizens against this move, but the world and the European banks largely ignored the warning due to greed of their own. There were billions to be made in the form of interest and signing bonuses.

All EU countries are part of the economic and monetary union to some extent, but not all of them use the euro. Two countries (Denmark and the United Kingdom) opted out of the euro at the time of the Maastricht Treaty. Others have not yet met all of the economic criteria required by the Maastricht Treaty, regarding for instance the stability of prices and exchange rates, to adopt the euro. (p. 4)

The main purpose of introducing the Euro is to help the poorer European countries to catch up to their richer counterparts.

The Euro brings many advantages. In 17 European countries do people pay with the same currency, the euro. The euro was introduced in 2002. Almost all Member States will start using the euro. During the financial crisis for many people the usefulness of a strong single currency become evident.

One of the aims of setting up the Eurozone common market was to all for

There are many problems facing the European Union, banking crisis, the declining in intra-European solidarity and growth crisis. Specific businesses have increased their prices in some European countries faster than the other countries, which caused the euro to become less competitive; if the euro was cracked and some countries changed to their own currency then they would be able to lower their exchange rates. This would make their goods reasonably priced for the rest of Europe.

Essay question: History shows us that attempts to fix exchange rates or create monetary unions between different countries usually end in failure. Therefore, we should not be surprised by the current problems in the Euro Zone. Discuss

In that stage, Union fixed the exchange rate, euro introduced as a single currency. European Monetary Institute replaced by establishment of European Central Bank.

One of the most substantial evidence of European integration is the euro, which is the most widespread currency in 19 out of 28 European countries. Euro is used by 338.6 million people every day. The advantage of the familiar currency is instantly evident to anyone travelling in a foreign country or shopping online on websites based in an additional EU country. The euro zone is formally called the euro area, which is the geographic and economic section that