THE EUROPEAN UNION & the Euro – a historical overview Celebrating the European Union: A Half Century of Change and Progress Since the creation of the EU half a century ago, Europe has enjoyed the longest period of peace in its history.
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THE EUROPEAN UNION
& the Euro – a historical overview
United in diversity
Combined population of
EU Member States
Percent of world’s
Percent of combined
From Free Trade Area: the elimination of tariffs
via Customs Union: an FTA with a common
to Single Market/Economic Union:
Council of Ministers (of the EU, not: the EU Council)
European Commission President José Manuel Barroso
European Court of Justice
European Parliament in session
European Coal and Steel Community
Jean Monnet and other leaders with
the first “European” ingot of steel
Signing of the Treaty of Rome
Economic stagnation, Nixon’s withdrawal from Gold Standard
Yet, in 1979 the European Monetary System (EMS) & ECU created to keep EU currencies pegged to each other/DM
Jacques Delors and the SEA (1986)
End of Cold War (1989-91) and Maastricht Treaty (1991/3)
= Europe united
EU President of the Council (strong or weak one?
Tony Blair/Felipe Gonzalez/JC Juncker?), who for
EU’s High Representative for Foreign Affairs/EAS?
New EU Member states are required to take on the Euro once their econ. & fiscal situation permits it
(‘Convergence criteria’: Low debt (>60% of GDP) & budget deficit (>3%), low inflation & stable interest/exchange rates)
Former Yugoslav Republic of Macedonia
Bosnia & Herzegovina
Serbia including Kosovo (under UN Security Council Resolution 1244)
With German reunification 1990, EMU presents opportunity to tie a unified Germany to the EU/EC by creating common ‘bandwidth’ of currency fluctuations & deciding which countries can take part (by 1998) (Stage 1) - single currency instead of common currency!
Jan 1, 1999 =launch of currency at $ 1.18 and ECB creation (Stage 2)
Final money intro/circulation Jan 1,2002 (Stage 3)
Results: Reduces cost of business/transaction costs, reduces exchange rate risks, but also reduces national monetary flexibility
The euro is as stable as the best-performing currencies previously used (currently: too high, making EU products expensive compared to US); popularly accepted (60%) & world reserve currency
The euro was introduced in 1999