StudentShare solutions
Triangle menu

European Monetary Union - Assignment Example

Nobody downloaded yet
In a sense, inefficient exchange of goods, because of price stability is hence discouraged and efficient economic transactions are thus promoted.
With all the obvious constancy in prices, it's not all peaches and roses for an optimum currency area. One drawback is that member nation doesn't have the prerogative to pursue its own independent growth and stabilization policies when faced with economic mishaps that might require particular policy measures. Expansionary fiscal and monetary policies can address uptight circumstances of one nation in its desperate call, but another nation may require what is otherwise. Participating economies do not at all face similar problems more so granted with the same solutions at the same time. In a way, interregional and international differences are issues still too difficult to mitigate since business cycles that reflect upon the economy are diverse. By default, Europe with all the technicalities displays behavior apart from the optimal currency area criteria it requires since Euroland falls short of procedural adjustments that can offset exchange rate fluctuations given differential economic situations (Gobetti 1999). Essentially, this partial overview of the system of integration is the "glorified straitjacket" the European Union tried to squeeze into.
It was in 1979 that the European Monetary System was announced with an aim for a superior monetary integration among its members. A single currency creation was then the extreme task to accomplish to which the European Currency Unit was a sound backdrop for its initial stage. Several rudimentary conditions and features were formulated by the EMS in order to exercise a better operation and execution of its activities without striking out of the borders of its general framework. In 1989, there was a call for convergence of economic performance. In its transition to a monetary union, the Maastricht Treaty provided conditions to be met if any nation wished to become a member. Budget deficits not over 3% of GDP; government debts not exceeding 60% of GDP and numerous issues on exchange rates gave birth to the SGP or stability and growth pact under which participating countries would operate. This was restructured in a stricter means in the belief that with respect to a smaller than 3% budget deficit member countries to keep hold, it will be feasible to conduct expansionary fiscal policy during times of recessions (Salvatore 2001). Monetary policies are then out of the question since its initiative is foregone in monetary unions. Penalties will be imposed to nations that will violate the fiscal indicator. The Maastricht Treaty thus paved the way to a true monetary union and the ultimate goal of a single currency was met. The European Monetary Union was established and the euro was born.
The adoption of the euro facilitated a more rapid economic and financial integration of member nations as it eliminated the hassles of converting local currencies to foreign denominations and even reduced cost of borrowing in international financial markets. Cross border transactions were ...Show more
Cite this document
  • APA
  • MLA
(“European Monetary Union Assignment Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from
(European Monetary Union Assignment Example | Topics and Well Written Essays - 1000 Words)
“European Monetary Union Assignment Example | Topics and Well Written Essays - 1000 Words”, n.d.
  • Cited: 0 times


In the discourse of the system of monetary unions, it is primarily imperative that discussions about optimum currency areas as provided by a fixed exchange rate be on the premise. This theory focuses on different national currencies' linkages to one another under permanently fixed exchange rates meeting specific conditions that make such bloc optimum in a sense currencies move all together sharing as they do a single unit as medium of exchange…
European Monetary Union
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the assignment on your topic
"European Monetary Union"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

The Development of Second World Countries in the European Union
The different countries that are a part of the European Union have a different status in terms of economy, politics and the social well – being within the nations. The differences between second world countries have created a gap in the past decade, specifically in terms of economics.
12 pages (3000 words) Assignment
Development within the European Union of the Second World Countries
Development within the European Union of the Second World Countries. This paper defines and identifies Second World countries within the European Union and focus the discussion on the process of the development these countries went through. All ten Second World countries (Bulgaria, the Czech Republic, Estonia, Latvia, Poland, Romania, Slovakia, Cyprus, Malta and Slovenia) in the EU had gone tremendous changes in their political, economic and social way of life that in the eyes of the global market, these countries are still in the process of transition and can be also classified as Transition countries.
35 pages (8750 words) Assignment
Switzerland Country Analysis
However, development does not always refer to a shield that the country might enjoy against any sort of global economic fluctuations or change in economic variables like exchange rates. The present paper focuses on the impact of exchange rate on business activities along with any sort of counter measures that might have been opted by the country or any business entity belonging to that country.
4 pages (1000 words) Assignment
The European sovereign debt crisis
The debt crisis made headlines globally because of its destabilizing effects. Renewed challenges in global financial markets are closely associated with the debt crisis. It is vital to study the effects of the crisis on the financial markets using an event study approach that focuses on theoretical perspectives.
8 pages (2000 words) Assignment
Uk Participation in the European Single Currency
EU came into force on 1st November 1993. The EU headquarter is in Brussels, Belgium. The European Union is an official department where all the countries agree on a single trade policy and it is like an agreement where the trade barriers between the members of the European Union are removed.
14 pages (3500 words) Assignment
The Development of Second World Countries in the European Union
The differences between second world countries have created a gap in the past decade, specifically in terms of economics. The development of the
12 pages (3000 words) Assignment
Economic and Monetary Union in Europe
This system also guarantees deferred payment”. In the 1940’s America and Britain tried to introduce an international monitory system under the label of Bretton Woods. Bretton Woods system failed to prosper because of many reasons. However, during the latter part of the twentieth century, European countries succeeded in integrating the European world.
5 pages (1250 words) Assignment
What are the principal institutions of the European Union To what extent do these institutions engage with the sources of EU law
They include the council, court of justice, the European commission, the central bank, European parliament and the court of auditors (Cini and Borragán 2010, p.34). These institutions are independent and also
6 pages (1500 words) Assignment
Economic issue
2. IMF has significant influence in the developing economies where it assists in development agenda. However, it is important to note that it has always come up with some economic restructuring policy that affects the citizens.IMF have in some instances
1 pages (250 words) Assignment
European Union
In the EU, the Treaty Functioning of the European Union (TEFU) is like the jewel in EU law’s crown. This is because it gives the national court power to follow up with Court of Justice and request it to make rulings regarding
1 pages (250 words) Assignment
Comments (0)
Click to create a comment
Let us find you another Assignment on topic European Monetary Union for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us