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The Euro as a Common Currency

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The Euro as a Common Currency
Economic Policy Challenges from the Crisis

The Euro as a common currency

Oscar Guerrero Olivares h1150248 Pages 3-16
Eric van Wickern h1150045 Pages 17-33
Table of Contents Economic Policy Challenges from the Crisis 1
Introduction 3
History 4 1ST Stage 5 2nd Stage 5 3rd Stage 6
Economic Policies 7
Monetary Policies 8
Exchange Policy 9
Fiscal Policies 9
Market Policy of Work and Employment 10
Microeconomic and Structural Policies 11
Coordination between Countries and Economic Policies 12
Advantages and Disadvantages 12 Advantages 12 Disadvantages 14
Convergence of economic fundamentals 17
Development 18
PIIGS 21 Ireland 21 Greece 22 Portugal 23 Italy 23 Spain 24
Comparisons to other currencies 24 U.S. Dollar 24 Pound Sterling 25
Reasons not to want the Euro 26 Slovakia 26 Poland 27 Czech Republic 28
Who’s paying for the financial crisis? 29
The Future of the Euro 30 Eurobonds 32
Conclusion 33
Bibliography 34

Introduction
The Euro is nowadays the common and official currency of the participating countries in the Economic and Monetary Union (EMU), which are those sharing the same market, the same currency and a unique monetary policy. Concretely, 17 member states form the economic and Monetary Union today. These States are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
The currency is also used by 5 other European countries without taking account of Kosovo, what leads to the fact that 327 million Europeans use this currency day after day. The five countries are: Monaco, San Marino, Vatican, Andorra and Montenegro.
For this reason the euro-zone is formed by all those Member States which have adopted the euro as their common currency, in addition to Monaco, San Marino, Vatican, Andorra and Montenegro and the outermost regions of some of the euro-zone countries, for instance Guadalupe,


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