EUROPEAN MONETARY UNION
Introduction With the coming of the New Year in 2002, a single currency was launched across the borders of 12 member nations of the European Union, replacing individual national currencies and selecting the euro as their one shared monetary denomination. ... Part1) Explain the origins and features of the European Monetary Union (EMU) There is a long history of the establishment of the European Monetary Union. In 1952, France, Germany, Italy, Belgium, Holland and Luxembourg found the European Coal And Steel Community. The same members formed the European Atomic Energy Community. After that, in 1958, TREATY OF ROMA formed the European Economic Community, it have the same six members countries in ECSC and EAEC. ... In 1985, Single European Act changed EEC to European Community. ... In 1989, this is a very important year for the EMU, Maastricht Treaty made rules and time plan for EMU, and change EC to European Union. ... In December 1991, the members of the European Community took a historic step toward future union. The Maastricht treaty carried out a plan for the establishment of a single currency and a European central bank on January 1, 1999 at the latest. Along with transaction of various other changes bring about closer trade and capital market integration in Europe, member states were to fix their exchange rates and formed the European Monetary Union with a identical currency, that is the euro. ... Of the 15 European Union countries, 11 countries including Austria, Belgium, Finland, France, Germany, Republic of Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain fixed their exchange rates by irrevocably defining their currencies in terms of the euro. ... The establishment of EMU was a milestone in world monetary history. Macro policies to bring economic variables into consistency across countries that are necessary for a monetary union and fixed rates to survive. ... In order for a country to be permitted to join EMU, meanwhile those criteria is also the features of European Monetary Union: Firstly, the country’ inflation rates of consumer prices could not be greater than 1. ... The UK should be thinking not at a European level but globally about its economic and political place in the world. ... More than half of Britains trade is with the rest of the European Union. ... As we have learned, the European Central Bank is a independent bank, the EMU’s countries governments cannot dominate the European Central Bank, the ECB were not restricted by the political factors. ... The identical currency may improve the European become integral. If EU countries want more trade with each other and greater economies of scale, they need a single currency in the entire Europe to trade easily and more efficiently, this is a significant prerequisite for European integration. Deviate from a single currency, it is very difficult to converge the EU countries in economic union. ... So the disadvantage was generated in this example, there is only one same currency of euro-zone, the European Central Bank only can make the stable interest rates, so if the exchange rates is suitable for France, adversely it is unfavorable for Republic of Ireland. ... Perhaps the most serious problem for UK with the euro is the fact that UK will lose control of monetary policy. ... The European Central Bank rather than the Bank of England would set interest rates, exchange rates and so on.