Euro area: history

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2019-02-08 14:00:41

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A New settlement currency-the Euro-introduced in 1999, Already since 01.01.2002 g. this tender was issued in cash handling in the form of appropriate coins and notes. Today, the Euro area includes countries such as Austria and Belgium, Germany and Greece, Ireland and Spain, Italy and Cyprus, Luxembourg and Malta, the Netherlands, Portugal, Slovakia and Slovenia, France, Finland and Estonia. In these 17 States has the circulation of the single currency.

Euro Value

The Main task of the EU is the creation of a single economic space, which are able to provide some financial support between the participating States. To achieve this purpose was created the Euro zone.

The Quest for integration

The Currency area of the Euro was the biggest project of the 20th century. The implementation of the plan, without doubt had a global political and economic implications, becoming one of the most difficult stages of the integration process in Western Europe.

the Euro area

A Single internal market has existed in the EU since 1993, But its operation could not be successful. The fact that at that time the EU had their own national monetary system, differing from each other fluctuations, taxes and price levels. In this situation of full economic integration could not go even out of the question. To eliminate all these obstacles and created the Euro zone. The economies of all its member countries became much cheaper due to the free movement of services, goods, capital and, of course, the workforce.

Unified budgetary discipline became more progressive direction and at the macroeconomic level. EU countries have pooled their cash markets under the supervision and guidance of supranational institutions of Finance. This enabled the more securely to combat inflationary pressures, to reduce tax payments and interest rates. This process contributed to the growth of employment and production, and also became the basis for the stability of public funds.

The role of the Euro area and for all economic agents. After all, the single currency and monetary policy existing in the territory of the EMU, which means that the companies reduce the financial and price risks, and costs for settlement services. With the advent of the Euro for all countries of the monetary Union was launched a single monetary regulation. This led to a reduction in the level of working capital.

History of monetary systems

If young, the idea of creating the Euro? Not at all. Attempts to unify the monetary systems of the various States were made in those days, when the first coins. So, monetary unions was between the Greek city-States. Issued their coins freely circulate throughout the country.

Euro area countries

The Most significant attempt to create a common monetary system is the organization of commercial and political Union of the Baltic cities. In the 13th to 16th centuries they were in the Hanseatic League. At different periods in this community participated from 70 to 170 subjects.

Attempt to join one of several monetary systems continued in the future. So, in the 1st half of the 19th century, implemented a number of projects for the integration of the various monetary systems in existing or newly created countries.

In the 2nd half of the 19th century in Europe there was Latin and the Scandinavian coin Union. Within their borders the circulation of money began to implement on a completely different basis.

The Prototype of the Euro zone believe the Latin coin Union, created in 1865 by countries such as France and Italy, Belgium and Switzerland. After the war with Napoleon the monetary system of these countries was similar. Three years later in the Latin Union entered Greece.

Prerequisites for the creation of the European Union

The Integration processes between the States greatly accelerated their pace after the Second world war. It is the lessons and the devastation has revived the understanding to prevent the growth of nationalism in Europe. Another prerequisite for accelerating the process of integration was the desire by States to strengthen its weakened economic position. To restore its international credibility and political position sought primarily defeated Germany. In addition, the countries of Western Europe wanted to unite to curb the global influence of the Soviet Union.

Origins of the integration process

What started the unification of Europe? The starting point of the integration process is the DeclarationFrench foreign Minister Robert Schuman. In this document, published 09.05.1950, contained a proposal for the establishment of the ECSC (European coal and steel community). This agreement was signed by Germany, France, Belgium, Italy, Luxembourg and the Netherlands. Integration of this important sector of the economy has opened up prospects for the further development of this process in other areas.

the Euro area includes

The following steps were established by the European economic community (25.03.1957), and the European community on atomic energy.

Documents regulating the circulation of the single currency

In 1962, the EU issued a Memorandum where for the first time talked about the importance of creating a common European financial policy. It was the idea of “currency snake”, which was a fixing of exchange rates in all countries, to restrain within certain limits. However, in a short time to carry out this plan failed. The reason for that was the energy crisis of 1972, during which significantly increased oil prices.

fan zone Euro

The prototype of the Euro was introduced only in 1979; It was then between the Central Banks of the EU signed an agreement on the limiting boundaries of fluctuations in exchange rates. In the future, the idea of creating the Eurozone was developed in the Maastricht Treaty (1992) and the Single European act (1986). In these documents it was determined the basis for the emergence of a single currency, the timetable for its introduction and rules in the field of state budget members of the newly created Union.

Stability Criteria

How the state can enter the Eurozone? To do this, it must meet the following criteria:

  • Different stability of the exchange rate;
  • To have a certain level of prices;
  • To have a viable financial system.

Why is the Euro area as demanding to its members? Compliance with the above criteria will allow any country not only to enjoy the benefits of a single economic space and to bring in a certain amount of positive contribution. Only in this case, the Euro area is able to receive the balanced development of their economic sector. All of these stringent criteria of stability were enshrined in the Maastricht agreements.

Financial institution

Who administers the Euro? This function is endowed with the European monetary Institute, which is located in Frankfurt am main. The document on the establishment of this institution was signed in 1994 European monetary Institute was intended to lead the project to create the Euro and to observe economic processes in the EU.

the Euro area economy

Officially, the transition to a single currency was announced at the summit held in Madrid in late 1995 at the same time the new banknotes and got its name – “Euro”.

Emergence of a new currency

Countries in the Euro zone, began to use the new currency 01.01.2002 g. It was the day of appeals had been withdrawn from Belgian and French franc, Irish pound, Finnish and German mark, Spanish peseta and Italian Lira, Austrian shillingi, Portuguese Escudos and Dutch guilders.

But these States in the future is not limited to the Euro area. European countries not included in the initial list, constantly sought to raise their economic performance. So, to conform to the required criteria only since 2006 has become Slovenia. From this period she also entered the Eurozone. 01.01 2008, appeared on the list of Cyprus and Malta, and since 2009 – Slovakia.

Billing System

The most Important element, which has the Eurozone – the TRANS-European Automated System. It allows all business entities to make payments online. The operation of this system was launched simultaneously with the introduction of the Euro currency. This allowed significantly reduce the time required to pass payments between the subjects of different countries.

Economic impact of a new currency

Created in the EU, the Euro area has given a constituent significant weight in the global market. And all this is due to the fact that the aggregate share of goods produced in the member States of the European Union, equal to one third of total world volume. And for the companies cooperating with the EU, the emergence of the Euro has given the opportunity to work in a single currency zone that have reduced their costs of payment transactions when trading goods and services.

The New currency allowed to form a single, larger capital market. That is why the Euro to a lesser extent is affected by fluctuations in the dollar than any national currency. All this became a prerequisite for the reorientation of the international flowcapital.

Current Problems

In the Eurozone, there are seven economies that are experiencing significant difficulties. They can be observed in countries such as Ireland and Greece, Spain and Portugal, Slovenia, Cyprus and Italy. All of these States have a variety of private and public debt.

 the Euro zone problems

What else is currently facing the Euro area? Problems of this economic zone are associated with the imbalance of cash flows, the loss and the lack of competitiveness and recession. All this is reflected in the growing deficit in the trade balance.

The main problem of the Eurozone is becoming the recession. This process gradually penetrates into the most economically developed countries of Europe. For example, on the brink of recession is France. A sharp slowdown in economic growth is experiencing at the moment and Germany.

Fan zone

Despite the economic difficulties between the European countries does not subside sports interaction. In the countries located on the European continent, hosts many matches in football and hockey. For the convenience of the fans creates a so-called fan zone. Euro 2016, for example, these areas could see hundreds of football fans.

 a currency area of the Euro

At the same time for those who were in the fan zone, worked a variety of workshops, held meetings with various celebrities, and trained “football” language, etc.

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