The Pros And Disadvantages Of The European Monetary Union

European Central Bank (ECB): Sustainable fiscal policies by all the EU members and the punishment for those members that do not comply with the

Whether the United Kingdom decides to join the European single currency and replace the pound with the euro will have profound economic as well as political effects on the country so is a very important decision and has considerable variations in attitudes towards the topic, although the British public opinion has consistently opposed joining the euro. The euro is currency shared by 18 of the European Union's Member States. The euro was introduced in 1999 and automatically became the new official currency of 11 States, followed by another 7 countries joining to date. However, the UK negotiated an opt-out to from the Treaty meaning they don’t have to adopt the common currency as they fit a certain criteria [1]. Joining the European single currency can have major advantages for the UK, such as diminished uncertainty of exchange rate for businesses and the decreased need to pay transaction costs of changing currencies when abroad. It can also have disadvantages such as loss of domestic monetary policy and variable rate debt in the UK.

During my stay in America, I was pleasantly surprised to witness the changes that had occurred in the last two centuries. Ironically, the mercantile power that was Great Britain is now economically on par with its former colony of America. As I presumed, free market economies are far stronger than their former mercantilist counterparts as they are the standard in modern democratic societies. It seems that global economies now realize that the market is not a zero-sum game, mutually beneficial deals can be reached that facilitate free trade which stimulates market activity.

The European Union was created on the notion of peace and prosperity. But has it really lived up to its promise? Tensions are brewing. Maybe it’s time to leave the EU once and for all. The EU originated after the Second World War, with only a few countries within it, but it has grown over many years and now has twenty-eight different countries. They share a national anthem that binds them through the power of music. The EU now presents more disadvantages than advantages, the countries participating have their cultural diversity being limited, their own countries laws are being superseded by those of the EU, and their economy’s are too dependent on one another.

The European Economic Community was an organization started in 1957 by France, West Germany, the Netherlands, Belgium, Italy, and Luxembourg, in post War World II torn European. This organization was a union between the Steal and Coal Community and The European Atomic Energy Community. The goal of the organization, heavily influenced by John Monnet one of its founders and National Liberation Committee member at the time, was to build a stronger cohesive Europe through collaboration and economic ties to bring mutual prosperity. This organization and its ideals developed into the well know European Union of today, that currently sits with 28 members. However, one controversial possible membership has increased in importance over the years.

Marsh gives interesting arguments developing the various reasons by which the crises is in place and some solutions like producing a political union for all members and breaking deals among creditors and debtors despite thinking the EU is not currently led strongly or cohesively enough to achieve them.

Adoption of the Euro is directly related to the idea of the Economic and Monetary Union (EMU), which is a single, highly integrated economic market. The EMU was created in 1992 through the Maastricht Treaty in order to create the single market with a single currency, the Euro, and the EMU is defined by close economic policy creation between the members who fit the criteria. In order to join the EMU and adopt the Euro, a country must meet stringent economic requirements demonstrating its stability, including a low inflation rate, good exchange rate policies, and general fiscal rectitude. The European Central Bank manages the EMU and the Euro, and while member states have their own fiscal policy independence, member states of the Eurozone agree to set of best practices for fiscal policy under the Stability and Growth Pact. The success of the EMU hinges on coordination of policies and ideas between its member states. While the European Union states that the Eurozone is beneficial due to its unified market and currency policy guaranteed by stringent controls and stability from the European Central Bank, the Eurozone crisis of 2009 proved to be distatrous in both Europe and globally.

Single Market and Community only ♦ -from 1.01.1999, when the euro becomes currency of 11 of the 15 member states.  2. Strengths and weaknesses of the European Union.   Firstly, it should be given the "price" of disunited and divided Europe.

The actions taken by central banks were essential in counteracting the 2007-2008 financial crisis and its consequences. Their measures, aimed to increase the monetary base and to restore trust on markets contributed to the prevention of a global financial collapse. However, the central bank interventionism jeopardizes the future discipline of both governments and banks as they recognize the central banks as last resort guarantors. This essay will therefore elaborate on the standard and non-standard monetary policy measures undertaken by the European Central Bank while counteracting the effects of the financial crisis of 2007-2008 and the consequent debt crisis in Eurozone.

In 1992, twelve countries came together and signed the Maastricht Treaty creating the European Union (Krajewska, 2014, pp. 6-25). The last obstacle that the EU had to face was the different currencies of each country, therefore a decade later on January 1, 1999 the Euro was created. Many countries that adopted the new currency fell within the Euro Area. Each country had to discontinue their old currency and the monetary policies giving control the newly formed European Central Bank (ECB), but each separate country still had their own fiscal policies one of the key reasons for the current debt crisis (Krajewska, 2014, pp. 6-25). The union of multiple countries into a central body seemed to be a wise choice for greater economic growth, but the failure from one country is a failure for all.

Over the last few years, the EU has been the main focus of the world as the sovereign debt crisis unfolds. The European Central Bank (ECB), which started out as a hyper-independent central bank later played a more political role that is initially intended by its creators. The article discusses about the origins and evolution of the European Monetary Union (EMU) as well as the ECB leading up to the sovereign debt crisis in Europe.

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.

Accounting for 20 percent of global imports and exports, the European Union (EU) is the world’s biggest trader. This should not come as a surprise because free trade among its members is one of the founding principles of the EU. With trade policy being in the exclusive jurisdiction of the EU, this creates new market opportunities for European exporters, workers and investors. The creation of this global market also creates the need for the EU to protect the interest of its 28 members from serious injury by resolving trade issues that go far beyond tariffs.

The Maastricht criteria for convergences is a criteria for which European Union member states are required to meet to enter the third stage of the European Monetary Union (EMU) and adopt the Euro as their currency (Viskovic, 2012). The criteria includes five rules which act as instruments of macroeconomic stabilisation (Bukowski, 2006), which were implemented to avoid destabilising the EMU by the premature admission of countries whose underlying economic performance was not yet compatible with permanently fixed exchange rates. These criteria have been used as conditions since the implementation of the euro in 1999, however, even before the recent euro crisis there has been speculation about the effectiveness of this criteria.

The criticisms of the Eurozone keeps on rising from many people living in the region, as we can see early on this year Britain has voted for the Brexit. That leaves many people surprised, as well as leaving the economic stability volatile; the euro currency has been fluctuating in such a wide magnitude. Recently, the Italian Prime Minister Matteo Renzi resigned after the failure to persuade the country to come into constitutional reformation to leave the EU. That leaves many people ambivalent whether or not euro was a mistake.