The Pros and Cons of EMU - European Monetary Union. A concise summary (3000 words) of the main pros and cons of EMU and the Euro - covering economics, social issues, national soviergnty, etc.

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

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.

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

Created in 1913, the Federal Reserve System was established to serve as the central bank of the United States and to provide the nation with a save, flexible, and stable monetary and financial system. Over the years, the Fed's role in banking and the economy has expanded, but its focus has remained the same (Federal Reserve Bank ). However, other countries also have their own central banks, such as the Bank of England, the Bank of Canada, and the Bank of Mexico. Because of this, economic policies were set almost exclusively with that country’s interests in mind—devaluation of currency to cheapen a country’s exports was common practice. Nevertheless, every country had protectionist views on banking policy based solely on national self-interest contributed to and deepened the results of the Great Depression.

Most citizens of the euro area did not understand what they were losing when the Maastricht Treaty was signed in 1992, and the euro introduced in 1999. You couldn’t see it until there was a serious recession—when the government really needed to use expansionary

This story is enlightening due to a clear overview of how a single currency with the ultimate goal of union and growth results idealistic as differences, not only regarding cultural and social backgrounds but also political ones, makes it very difficult for the Eurozone as a whole to have the same objectives and interests.

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.

In this report, we will take a closer look at Britain’s strategy to not adopt the euro currency, and the possibility of adopting the euro in the future. To do that, we must first make a better understanding of the benefit of using the single euro currency.

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.

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 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.

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

The member states of EMU (European Economic and Monetary Union) are bonded in single currency, Euro. They must have a different way of decision making in economic policies.

EU was founded in 1957 with a goal to build a common market. To achieve this goal a close co-operation on economic and fiscal policies between member states is needed. Hence, the Economic and Monetary Union (EMU) was born in order to achieve the single market goal. The coordination in Economic and Monetary Union involves the economic and fiscal policies through a common monetary policy for all member states and a common currency, euro. The European Central Bank (ECB) was created to take care of the monetary policy of the Eurozone and to be the national central banks of the euro area countries.

The Maastricht treaty laid out certain, strict qualifications a state had to meet in order to join the European Union; these requirements were to prove that the nation’s economy was strong. Despite the entering guidelines, a single currency cannot fulfill the needs of differing countries in the real world. A major issue of the Euro was a low interest rate, which caused many countries to borrow a large amount of money in order to pay off their national debts; Starting in 2008 and continuing today some countries have started defaulting on their loans and have called for a bailout. Of the nineteen countries that currently use the euro as currency, several have called for a bailout such as Greece, Ireland, Portugal, Spain, and Cyprus. (European Union, “The Euro”)