Euro
Background:
The Euro was established January 1 1999, serves as the official currency of the eurozone = 16 of the 27 Member States of the EU has adopted the Euro as their primary currency. It currently consists of Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain. Eight (not including Sweden, which has a de facto opt out) other states are privileged to join the zone once they fulfill the strict entry criteria. Britain is part of the EU but refuses to use the EURO currency.
The Euro is also used unofficially as the main currency in five other countries as well. Daily used by some 327 million Europeans. Internationally over 175 million people use this currency including 150 million people in Africa.The euro is the second most traded currency in the world after the US Dollar, over 800 billion pounds in circulation as of June 2010.
The eurozone is second largest world economy.
Resolutions:
1. THBT the Euro needs to be ended.
2. THBT the Euro has failed.
3. THBT the European Economic Zone has failed.
PRO’s (+): | CON’s (-): |
Ø It unifies countries in the UN boosting their economies due to easy trading between countries. | Ø The Euro has too many countries involved. Soon they will monopolize the international economy. Not fair for trading with countries that are not in the UN or eurozone. |
Ø Easy for daily life and travel throughout Europe. | Ø |
Ø Countries can help each other out when in economic trouble. | Ø Effects eurozone if a country goes bankrupt (ie. GREECE) |
Ø Economically smart because you have a bigger market to choose from. It is more competitive between companies in different countries. | Ø Gives the EU too much power and control. |
Ø Provides a monetary system no t dependent on only one countries economy so it is more stable. We need more and more countries to join. | Ø What separate the countries? One world economy? One big country? Not realistic. |
Ø Shared Responsibility – All for one and one for all. They work together. | Ø National Sovereignty – Takes away from countries being sovereign and independent. Countries have no other choice but to join and use Euro if want to be competitive. |
Refrences:
a. “She portrays her actions as an attempt to save the euro from the ravages of rich financiers and to make them pay the price of irresponsible lending. But she knows, too, that the markets, not voting rights or EU penalties, are the strongest sanction on wayward members of the euro zone. “
a. The leaders of 26 European countries bowed resentfully today to German determination to rewrite the EU's Lisbon Treaty to shore up the euro.
b. In May, the EU and the IMF put up an €860bn umbrella to protect Greece and defend the currency. Those emergency funds lapse in 2013.
c. The Germans believe that forcing creditors to share the losses in the event of a sovereign debt rescheduling or default will make lenders less reckless, expose profligate countries to higher risk premiums, and encourage fiscal rigour.
a. According to BBC News, the EU will now have extra powers to scrutinise national budgets in depth and a permanent fund will be established to help bolster the euro in an emergency.
a. The EU says China’s dollar peg keeps the renminbi undervalued relative to the euro, helping Chinese exporters grab market share from their European competitors. But how big is the impact?
b. As EU trade commissioner Karel De Gucht said recently “They have an undervalued currency, but we should not have the reasoning that this is the only explanation why they have such huge exports and that we have a huge trade deficit with China.”
a. Ireland will cut six billion euros from its budget in 2011 under an austerity drive to save the debt-ridden eurozone nation 15 billion euros over four years.
a. EU finance ministers have backed Estonia's bid to become the eurozone's 17th member on 1 January 2011.
a. Estonia, with its 1.3 million inhabitants, had initially hoped to join the euro club in 2007 but was prevented from doing so by high inflation rates at the time. Ex-communist country.
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