Europe has suffered from the recent subprime financial crisis, which has spread through the stock markets in all developed market economies. This crisis will bring these countries to an economic downturn, which will perhaps, allow them to take stock, and hopefully help them avoid repeating the mistakes that were made in the past, such as financial speculation, and abuse of the financial markets.
A European recovery is expected in early 2009. A recovery can only be done at the European level, because of European monetary policy which is common to the member countries of the euro area. The Euro (single currency of 15 European Union countries) is the outcome of the will to establish a common monetary policy, but it seems to be only a step towards a federal Europe. Indeed, European integration has often faced obstacles, and has been stalled for many years.
The Maastricht Treaty of 1992 boosted the construction of Europe with the European Monetary Union in the fifteen countries that adopted the Euro. Yet, the problem of Europe and the federal establishment of a European budget is an issue faced by the entire European Union today. The Euro sometimes appears to be an obstacle to the autonomy of member states, because monetary policy is no longer the responsibility of states that have adopted the Euro. Since the introduction of the European Central Bank, many prohibitions have been imposed so that the European monetary union seems to be harmful.
Thus, establishing a common budget seems to be required in order to converge towards a federal Europe that would be the competitor of the United States. Thus, if the Euro though the culmination of European monetary policy, it also seems to be a stage in the European construction. Since 1957 and the Treaty of Rome, Europe saw the emergence of the will to establish a common monetary policy, whose outcome was the euro The euro is by far the most successful part of European history, and it seems difficult to further European monetary policy without it.
Tags: European recovery, European Union, The Maastricht Treaty, European Central Bank, European monetary policy, market economies, stock markets.
[...] Besides the many political and economic obstacles, we must bear in mind that the establishment of a federal Europe is largely a matter of will and that is where the problem lies since the Europeans are not ready for such a political structure; Indeed, the French and Dutch ‘no' to the European constitution is still ringing like a bitter defeat for European politicians. Though the Lisbon Treaty is well underway, it remains a psychological barrier in conjunction with the cultural and linguistic diversity. [...]
[...] The Treaty of Maastricht Sami thus terminated the EMS, and brought about the launch of the Euro which brought the Common Monetary Policy to an end. The Euro is the single currency of its type in Europe. It was adopted by nearly 12 countries, and today, is the currency of fifteen European Union countries. This single currency is managed by the European Central Bank (ECB) based in Frankfurt, Germany. By accepting the Euro, countries which were having a budget deficit below of GDP, public debt below 60% of GDP and inflation that exceeds no more than 2 points the average inflation of three countries with the best results in this field, had to comply with the convergence criteria imposed by Maastricht. [...]
[...] Also, in autumn 2008 when the financial crisis was strong, all the European countries opted for bailout scholarships, and the banks had roughly the same content. This shows that countries still almost all demonstrated the same behavior in case of difficulties. It is felt that Europe is strong, and the establishment of a European budget is a key measure that Europe must take to become an optimum currency area, and move towards a unified policy. Europe has no real common policy. [...]
[...] The euro also aims to compete with the dollar on the field of international currency exchange, and thus gives Europe an ever more important role in world trade. However, the euro does not denote a politically unified Europe, and though the euro is the culmination of a monetary unification of Europe, it is also a step towards a political Europe whose outcome would be a federal Europe. Thus, the Euro is a big step forward towards European political unity, because Europe is not an optimum currency area, and there are no plans for and particular policy convergence in the social sphere. [...]
Online readingwith our online reader
Content validatedby our reading committee