The Euro Essay -- Currency Currencies Finance Economy Essays

The Euro The new inter matter currency of the European Economic union, euro became the national currency on January 1 2002. In this union where only euro is valid as currency includes Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, Netherlands, Portugal and Spain and their national currencies will cease to exist. Before the euro formation, in that location existed the specious standard and the Bretton Woods system. Both were aimed at the internal and external stability. These policies collapsed when the two goals diverged. Since the euro eliminates the exchange rate problem and focuses more on the internal stability by unifying currency, the policy target dichotomy can be resolved. Even though nothing standardised euro has been established before, it was formed to benefit the European parsimony by controlling the budget deficit, by having a more stable government, and by creating an even closer union among the people of Europe thus there are many be nefits that will allow euro to exist in the long run. The formation of euro has increased the importance of internal stability such as wrong stability and employment. The Europes move to euro must stand on a foundation of stable government policies. The stability will cause swallow prices, lower interest and create more jobs and investment. The internal stability should be build from the inside and not pressured from the outside by fixed exchange rates, fiscal stability had to be built at home quoted by Heinz-Peter SpaHn. By uniting Europe the home area has expanded. The articles in the Treaty on European Union clarifies that the budget deficit cannot exceed 3% of countries gross domestic product by establishing very clear surveillance procedures. The deficit ... ...sizes and colors and posses resembling designs in all 12 countries. This makes it easier for a foreigner to recognize the bank note. The formation of euro can bear two outcomes. It is either the massive experime nt like the critics says or it will succeed in the future and stabilize the economy by focusing on the internal balance. By increasing trade and reduction trade restrictions Europe will be more integrated. The increase in competition will benefit the growth of the economy. For economy to expand there have to be new innovations. To have new innovations, there have to be experiments in the economy. The introduction of euro is completely new in our economy and it is a great experiment that will succeed and promote the overall economic growth. This is not a short run move. Euro needs time to develop so that the unspoilt results should be seen in the long run.