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International Financial Markets: European Monetary Union

In: Business and Management

Submitted By ianpulse
Words 2658
Pages 11
Critically analyse the current state of the European Monetary Union.

The European Monetary Union or the European Economic and Monetary Union (EMU) is the successor to its predecessor: The European Monetary System, and attempts to deliver an economic system which is unified and cohesive for all the members of the European Union. Perhaps the most notable and drastic change implemented under this systematic collection of policies is the adoption of the Euro currency over the national currencies of the member states out of which only the United Kingdom and Denmark have chosen to not follow in the footsteps of their fellow member countries.

The European Monetary Union is essentially a complex but involved coordination of a common monetary policy amongst all members of the European union, accommodating fiscal and economic policies and most notably the currency common to all members, the Euro. This decision to form an exclusive and unified front was undertaken in December, of 1991, in the city of Maastricht in Netherlands and was later more firmly integrated in the Maastricht Treaty on the European Union. It has been designed as a tool to implement the full economic integration of the European Union and to complete the integration as one system, which started in 1957. Through this integration, the European Union hopes to gain the benefits of having a larger sized failsafe net, internal and cohesive efficiency combined together with the European Monetary Union, it would provide a robust and firm platform for the members of the union. Better employment rates, together with higher growth indicators, and solid economic stability are the expected outcomes of such a union however, its main objective remains to ensure the price stability within the region through the adoption of the common currency along with a total liberalization of movement of capital, the fixation of…...

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