Past, Present and Future
On the 1st of January 1999 the nations of Europe made their individual national currencies denominations of one single currency (the Euro). The Euro-system (European Central Bank (ECB) and the national banks of the participating countries) was now responsible for the monetary policy for the European area. “The Euro was implemented with the goal of creating a more stable European economy” (History, 2011).The historic and challenging task of introducing a single European currency would have great effects and the political and economic climate of that area as well the international monetary system on a whole. The idea of a single currency first came about as an attempt to bring the European region together. The thinking was; a united economic system would reduce the risk of war and discontentment between the countries. Through economic integration, perhaps political differences could be settled and even open the door to integration in other areas (The Euro, 1999). The European Union (EU) hoped to create economic stability, good competition, and business opportunity in the European markets. They also sought to stimulate growth in Europe’s economy and give the region a more concrete footing in the economy of the world with a unified economic and political front. The participating nations are Belgium, Germany, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Portugal, Finland, Greece, Slovenia, Cyprus, Malta and Slovakia. Other countries like Sweden, Bulgaria, Poland, Hungary and the Czech Republic are making plans to adapt the euro also adapt the euro. However Denmark and Great Britain have chosen not be a part of this monetary union (Hermes, 2011). Some of the advantages of this new currency are the low costs of financial transactions, the free movement of capitol, the free moment of people throughout the region and the notable strengthening of Europe in the international arena (Towards, 2011). One of its biggest effects on the foreign exchange markets was the fact that a number of currencies that were actively traded disappeared and were replaced by one main currency. This rapidly changed the turnover and focus of attention in the foreign exchange market (The euro, 1999). History
On the 9th of May in 1950, Robert Schuman (French Foreign Minister) suggested the introduction of a community of specific interests. Today this date is celebrated as Europe day. After this suggestion, the “Schuman Plan” was enacted and six countries signed a treaty that established the European Coal and Steel Community (ECSC) on the 18th of April 1951. These countries were (Germany, Belgium, France, Italy, Luxembourg and the Netherlands). The Treaties of Rome were later signed to bring about the European Economic Community (EEC). and the European Atomic Energy Community (AEC) (Towards, 2008). The Treaties of Rome
The treaties of Rome were signed on the 25th of March 1957. The treaties included the European Atomic Energy Community (AEC) and the European Economic Community (EEC). The signatories of these treaties were Christian Pineau of France, Joseph Luns of the Netherlands, Paul Henri Spaak of Belgium,Joseph Bech of Luxemburg, Antonio Segni of Italy and Konrad Adenauer of Germany. The treaties became a reality by the 1st of January 1958.The countries involved laid the foundation for the ultimate goal of a unified Europe. There was a third agreement in the Treaty of Rome called the Common Agricultural Policy (CAP). This meant free trade of agricultural products between members of the EEC. There were also policies adapted (where farmers were guaranteed enough revenue) to protect EEC farmers from outside competition. The union also introduced the European Agricultural Guidance and Guarantee Fund (EAGGF) in 1962 to finance the CAP. In 1968 a customs union came into effect. All tariffs between EEC member states were...