The Future Of The Euro Essay

2557 words - 10 pages

The Future of the EuroThe European Union is the current talk in the world news and for great reason. Many of the nations that make up the union face large deficits and massive debts, while Italy and Greece owe more than they earn. If this situation is not handled correctly this crisis will not only affect the rest of Europe, but will potentially make its way to into the U.S. market. With Europe undergoing an economic depression, their monetary unit, the Euro, once one of the strongest currencies in the world could become obsolete to the global economy.The Euro was brought to life on February 7th, 1992 when the Treaty of the European Union, also known as Treaty of Maastricht was signed (Maastricht). The treaty brought together eleven of the countries that make up the current Union and introduced a new monetary unit, the euro. The 1st of January 2002 saw the Euro coins and notes become official legal tender not only in the 12 initial EU-member Eurozone countries, but also in a number of smaller nations, dependencies and regions (Maastricht). The euro was created under the belief that a common currency would enhance European solidarity and aid in achieving peace and prosperity in the region. Additionally, given that the majority of EU member nations' international trade is with other EU members, having a single currency eliminated exchange rate risks from internal markets, which cut the costs of transactions and facilitated businesses in trading across national borders. Trading and investment was thus expected to increase, leading to jobs and economic growth (Maastrich). With the euro taking the place of the currencies used by the countries in the European Union and forming one unit, it allows for higher trading in the world market.Imagine that the dollar and the euro are two banks, and you are deciding in which bank to put your savings. Jeff Faux of the Economic Policy Institute, describes this by saying, "One bank the euro is making a profit and is a net creditor, where more money is owed to it than it owes. The other bank the dollar, has been running a loss for 20 years, owes a net of $1.5 trillion to the rest of the world" (Faux). I think you know where you would put your money. Since 1999, the euro has surpassed the U.S. dollar to a ratio of 1.3, with a higher value than the dollar. Many more investors are purchasing stocks and bonds in Europe rather than in America, which only increases the euro's strength in the long run.Right now Europe is headed towards a recession and ultimately a depression. According to CNN "Fourteen out of 27 countries in the European Union had public debt exceeding 60% of their gross domestic product at the end of 2010, according to official statistics" (Debt). Essentially, these countries owe more money than they are earning. Greece has been the country that has suffered the most. Greece has been hit especially hard because its main industries, shipping and tourism are extremely sensitive to changes in a down economy....

Find Another Essay On The Future of The Euro

The Impacts of the Euro-Zone Crisis

1587 words - 6 pages fix the economic woes, not realizing that even newly appointed representatives are beholden to the rules of the euro-zone. As of today there is still no evidence that the austerity measures will work due to the limited choices faced by the governments of the member nations (Fidler, 2013). That in of itself could be a serious future threat to the existence of the zone. Unknown to the euro-zone at the time at inception were the many

Will the Euro Survive? Essay

1495 words - 6 pages European Union. The German Chancellor Gerhard SchrÖder said in a speech in 1999 that “The introduction of the euro is probably the most important integrating step since the beginning of the unification process.”(Yeager, 30) Therefore, in this essay I would like to study the history of creation of the euro, lessons that the European Union draws from the euro crisis and analyze the future predictions of specialists about the euro. I will use the

America and the Euro

4223 words - 17 pages America and the Euro America’s relationship with Europe has long been the cornerstone of our economic and foreign policy. Today, America’s fortunes remain fundamentally linked with Europe’s. Needless to say, we have a security interest in what happens in Europe, but we also have a vital economic stake. Together, the United States and the EU produce close to half of all goods and services in the world and account for over half of all world

Euro Disney the Failure

1324 words - 5 pages Walt Disney is the world leader in family entertainment and one of the most valuable brands in the world. Recently, Walt Disney has decided to open up a Disney Theme Park in Hong Kong China, which will be the first theme park in China. Since the opening of Euro Disney, the Walt Disney Company has learned to take into consideration important determinants so that their investment will not be a huge financial loss. Unfortunately, Since Disney did

The Adoption of the Euro Case: Sweden and England

2525 words - 11 pages once inside the euro zone, Swedish policymakers would be hamstrung” (Buerkle). In the future, changing their currency would not be expected for another decade for the country itself is not open to the changes. As of 2003, a poll by the Swedish population voted 53% against the euro (The Economist). Because of this, it will be sometime in the future whether or not Sweden will adopt the currency. Aside from Sweden, another country that did not opted

The Debate of Britain Joining the Euro Currency

1788 words - 7 pages Euro would be an economic advantage to Britain, both now and in the future. Politically, Britain cannot remain one of the leading countries in the European Union as long as it remains outside of the Euro. The opportunities for Britain to assume a leading role are great. Both France and Germany, the leading countries in the Euro, are looking for British support, but are both unprepared to trust

The Euro Versus the Dollar

1322 words - 5 pages by about $100 billion annually during the three-year period 1998-2000, nearing $450 billion or about 4.5 percent of GDP in 2000. The net international investment position of the United States reached a negative $2 trillion at the end of 2000. Hence it is quite possible that in near future the dollar may experience some sharp depreciation, the evidence of which is reflected in the excel sheet attached. Hence, in conclusion we can safely say that Euro does indeed pose a significant threat to the U.S. dollar.

The Euro & Whether Britain Should Join the Euro ?

4571 words - 18 pages from the idea.The treaty of Maastrict created timetable for the progression of the EMU. Firstly an EU monetary committee was set up which was to advise governments and the European commission about the step towards the Euro. In January 1994, the European monetary institute was created which would be the precursor for the future European Central bank. Though at this stage all countries in favour of the Euro begun to alter their domestic policies in

Euro Disney - Analysis of the External and Internal Environment

1386 words - 6 pages their environment analysis. In this case there has been a recognition of a trend, which is the trend of people going to theme parks during the weekends for entertainment of them as well as their children. Also here is an existing need for entertainment of this kind. Therefore, an opportunity exists in the European market that Euro Disney could have taken advantage of. However, their failure to pick up signals from the macro environment and

Influence of UEFA EURO 2012 on the Polish Economy

3862 words - 15 pages certain country. This kind of event could only make the economy better. The same assumptions, we can personalize with the event, that took place in Poland in 2012, “The UEFA EURO 2012”, which was I believe one of the largest Polish projects in recent years. I will analyze how event affected the Polish economy, what are today visible effects, and what may be in the future. Deduction effects for the future will be based on various sources of the

Macroeconomic flaws in the Euro

2050 words - 8 pages Fundamental Macroeconomic Flaws in the Euro Five years ago, the biggest thing in economic and international news was the introduction of the new European currency, the Euro, into circulation and into the pockets of the consumers of the participating countries within the European Monetary Union. In an attempt to unite Europe and to form a dominant currency to rival the US dollar, Europe locked their exchange rates and went full steam with

Similar Essays

A Brief Description Of The Pros And Cons Of Joining The Euro, And The Problems That May Be Faced By The Uk In The Future

659 words - 3 pages efficient and isn't maximising its labour, this will have a negative impact on the balance of payments. Also people are worried that if the UK doesn't adopt the euro future investment will be lost. Eventually demand for UK goods may decrease, as it is easier for firms within the 'Euro-zone' to trade with each other due to price transparency. Price transparency is a major advantage as it would make it easier for a consumer to compare goods and this

The Euro Essay

1304 words - 5 pages work for every country. Also those who do switch to euro are taking a big step into a completely new direction. So it is normal for some countries to be willing to try and for some to want to live the old way and not be influenced by others. Since the formation of euro US has been worried about the future of the dollar. The dollar has always been the major currency and now the dollar faces the first challenge. The gold standard and the Bretton

The Euro Essay

2258 words - 9 pages the new international currency anytime soon. Europe does not have a centralized tax system to coincide wit the Euro so it may not be so well suited for a single currency union. Maybe in the future as Europe becomes increasingly integrated will with its economies will it become the new currency standard of the globe. Many see the Euro as a positive development for Europe the United States and world economy. The European Economic Union will be

A History Of The Euro Essay

2364 words - 10 pages The EU and its single currency system referred to as the euro, is known today as one of the world’s most important currencies and is considered to be one of Europe’s most paramount achievements. The euro was launched January 1st 1999 automatically becoming the currency of more than 300 million people. From 1999 to 2002, the euro was classified as an invisible currency; merely utilized for electronic payments as well as accounting purposes