The Euro and What It Entails
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Dario Rainone
English 102-059
26 February 2011
The Euro and What It Entails
July 1st, 2002, marked a historic date as the beginning of a centralized monetary policy among the countries of the Eurozone. The German Mark, the French Franc, the Italian Lira and various other local currencies ceased to exist to be replaced by the Euro. Although the history of the Euro began with the Maastricht Treaty in 1992, which set forth the creation of the European Union, the idea of a single European currency dates back to the post World War I era. Its purpose would have been to avoid an ever-increasing economic division within Europe due to several new nation states. The modern, actual implementation of the Euro served primarily to improve economic growth, ease the exchange rate volatility of former currencies, and offer a greater financial integration among markets. Over the decades however, the degree of political union in Europe never caught on with the economic unification. Due to a lack of adequate political union within Europe, the monetary union set forth by the Maastricht Treaty is not a realistic long-term prospect.
The European economy finds itself in a difficult situation that Americans and even Europeans often overlook. In countries of the Old World that are less affected by the Euro crisis, little is discussed about the crippling debt and unemployment that other neighboring nations are facing. This phenomenon is not due to a scarcity of information, but rather to a lack of the public’s interest. Although the Euro was supposed to strengthen the spirit of European unity, it is not always apparent to Europeans that they are now part of a larger economy, in which all European countries are dependent on each other.
Since its establishment, the Euro has defined a clear line that separates the wealthier countries of Europe from the poorer. The differences appear striking. Several countries of Europe, such as Greece and Italy, have abnormally high public-debt levels....
English 102-059
26 February 2011
The Euro and What It Entails
July 1st, 2002, marked a historic date as the beginning of a centralized monetary policy among the countries of the Eurozone. The German Mark, the French Franc, the Italian Lira and various other local currencies ceased to exist to be replaced by the Euro. Although the history of the Euro began with the Maastricht Treaty in 1992, which set forth the creation of the European Union, the idea of a single European currency dates back to the post World War I era. Its purpose would have been to avoid an ever-increasing economic division within Europe due to several new nation states. The modern, actual implementation of the Euro served primarily to improve economic growth, ease the exchange rate volatility of former currencies, and offer a greater financial integration among markets. Over the decades however, the degree of political union in Europe never caught on with the economic unification. Due to a lack of adequate political union within Europe, the monetary union set forth by the Maastricht Treaty is not a realistic long-term prospect.
The European economy finds itself in a difficult situation that Americans and even Europeans often overlook. In countries of the Old World that are less affected by the Euro crisis, little is discussed about the crippling debt and unemployment that other neighboring nations are facing. This phenomenon is not due to a scarcity of information, but rather to a lack of the public’s interest. Although the Euro was supposed to strengthen the spirit of European unity, it is not always apparent to Europeans that they are now part of a larger economy, in which all European countries are dependent on each other.
Since its establishment, the Euro has defined a clear line that separates the wealthier countries of Europe from the poorer. The differences appear striking. Several countries of Europe, such as Greece and Italy, have abnormally high public-debt levels....