The European Union ( Eu ) And Euro

The European Union (EU) is an economic-political union of 28 member states that are located primarily in Europe. It operates through a hybrid system of supranational and intergovernmental decision-making.

On the first of January 2002, history 's largest currency changeover occurred. The changeover was a challenge of unseen proportions involving banking sectors, retailing companies and the overall public of the Eurozone. So how did this politically sound concept result in what can only be described as widespread economic turmoil? Of the member states, Portugal, Ireland, Italy, Greece, and Spain (PIIGS), have been the most condemned for their actions in the run-up to the crisis. Five years on, there are continued discussions of a possible exit of Greece from the Eurozone or 'Grexit, ' bringing into question the true stability of a single currency

The European Union was established by the Maastricht treaty in 1993. It provides an economic and political union between 28 European countries which makes its own policies in regards to the members’ societies, laws, economies and to a certain extent security. The European Union embodies the key principles of freedom, democracy, human rights and the rule of law as well as the values of equality, social solidarity, sustainable development and good governance (Knud 2013). There are many key articles within the EU including article three which states that it is the unions aim to promote peace the well being of there people and their values. Furthermore, article four highlights that in accordance with article five competences not conferred upon the unions remain with the member states. The EU institutions are responsible for employing over 40,000 people within the 28 member states. In addition, the European unions economy estimated at

The Euro is the world’s second largest currency: more than 337.5 million EU citizens in the 19 countries use it as their currency (European Commission). It was designed to ease the process of providing services, transporting goods and moving capital between nations. Overall, the Euro was made for enlarging mutual trade. At first, the Euro was launched as an electronic currency but became cash currency on January 1, 2002. This is the first time since the Roman Empire, that a good portion of Europe will have the same currency (Solomon). This date was not only important for the Euro but was also the beginning of a centralized monetary policy, the European Central Bank. The European Central Bank (ESCB) would then implant monetary policy on the countries using the common currency.

The euro was introduced on the 1st of January, 1999 to foster economic integration and growth. The current member countries of the Euro are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. The Euro involves a single, fixed currency within the Eurozone area. The member states are required to adopt a common monetary policy set by the European Central Bank (the same interest rate and policy on quantitative easing). The Growth and Stability Pact was incorporated to set strict limits on government’s budget deficit, gross debt and price stability.

A huge complication with introducing the Euro was that it induced very low real interest rates. Low real interest rates causes money to go from savings to investment and consumption, heavily increasing public spending and borrowing. These extremely low real interest rates are due to the effect of the single Eurozone interest rate on the countries with relatively high inflation. The low real interest rates caused excessive expansion in consumption and construction. This combination in particular is very risky because it may lead to an economic bubble through a large amount of investment being poured into real estate and stock markets, and that is exactly what happened. A perfect example of this is in Ireland; their housing prices nearly quadrupled from 1995-2007. All in all these low interest rates greatly encouraged a

On 1st January 1999, 11 European Nations decided to abandon their own currencies and establish a common currency named “Euro”. (Klein, 1998). At that time, Greek was the only EU Countries that are not allowed to join the euro club even though they wanted due to failure comply with the convergence criteria. However, with the help of Goldman Sachs, Greek government managed to mast their true

Once in a lifetime a family might make one large purchase or transaction across a European border such as buying a holiday home or a piece of furniture. A single currency would help that transaction pass smoothly. Likewise, “businesses would no longer have to pay hedging costs which they do today in order to insure themselves against the threat of currency fluctuations. Businesses, involved in commercial transactions in different member states, would no longer have to face administrative costs of accounting for the changes of currencies, plus the time involved. It is estimated that the currency cost of exports to small companies is 10 times the cost to the multi-nationals, who offset sales against purchases and can command the best rates”[1]. A single currency in the EU should overall result in lower interest rates as all member European states would be locking into German monetary credibility. The stability pact (the main points of which were agreed at the Dublin summit of European heads of state or government in December 1996) will force EU countries into a system of fiscal responsibility which will enhance the Euro's international credibility. This should lead to more investment, more jobs and lower mortgages.

As the world already knows, ‘Single Market’ is greatly known for European Union’s biggest achievement and

The European Union is known as a economic and political union that has 28 member states around the continent .The EU was established in the aftermath of World War 2. The idea behind the eu was that countries that trade with each other become economically interdependent and are less likely to get into conflict. What stared off as a purely economic union advanced into an organization covering policy areas, from climate, environment and health to external relations and security, justice and migration (Ayiekoh, 2016).

Consisting of nations such as Germany, Greece, and Spain, the European Union is a partnership meant to induce certain benefits for the European nations, such as a “peaceful coexistence, the reduction of border restrictions…combined strength and influence” and most crucial the construction of a single currency, the Euro (Schmidt). The official currency of Eurozone, the euro was expected to ease the process of capital exchange between 17 of the now 27 members of the European Union. However, in the context of our present day, instances such as Greece’s struggles with bailouts and Britain’s exit from the European Union has left people questioning if Euro will breakup soon. Interestingly, the current monetary conditions seem to mirror those of U.S. under the Gold Standard in the 1930s, such as the tightening of monetary. These similarities between between Euro and the Gold Standard have peeked investor’s interest by raising the questions, “is the Euro is a stand-in for the Gold Standard?” and if this is the case, “will it also fail?” In an effort to allow one to construct their own conclusion, this paper will introduce a comparison between the Euro and the Gold Standard through the categories of their purpose, organization, and crisis.

When the European Union was established in 1993, its goal was to create a common currency in Europe, called the euro (“Eurozone”). This goal was achieved in 1999, and the euro is now used by 17 European Union countries, including Greece (“EUR”). Greece adopted the euro in 2001, and their economy has been struggling ever since. Since joining the European Union, Greece has struggled economically, politically, and might continue to struggle in the future.

On the other hand there are many threats and disadvantages of single currency. The countries that are in the euro zone are diverse and have different economic performances, which are a threat, since there might not be one ‘suitable for all’ monetary policy.

The European Union (EU) is a political and economic partnership that represents a unique form of cooperation among 28 member states. Formed through a series of binding treaties, the Union is latest in a process of integration begun after World War II in Europe to promote peace and economic prosperity. Its founders hoped that by creating specified areas in which member states agreed to share sovereignty firstly in coal and steel production, economics and trade, and nuclear energy, it can promote interdependence and make another war in Europe. Since the 1950s, this European integration project has expanded to encompass other economic sectors; a customs union; a single market in which goods, people, and capital move freely; a common trade policy; a common agricultural policy; many aspects of social and environmental policy; and a common currency (the euro €) that is used by 19 member states. Since the mid-1990s, EU member states have also taken significant steps toward political integration, with decisions to develop a Common Foreign and Security Policy (CFSP) and efforts to enhance cooperation in the area of Justice and Home Affairs (JHA), which is aimed at forging common internal security measures.

The European Union (EU) is a distinctive economic and political union. It was established on the first of January 1958 with 27 member countries. The EU is located primarily in Europe (European Union, 2013). France, Germany, Italy, Netherlands, Belgium and Luxembourg founded the Treaty of Rome in the year 1957 and established The European Economic Community. (The European Union, 2012)