The euro currency introduction implied the start of a new era for economic policymaking in Europe, with a new environment calling for new arrangements for economic policy coordination.
The significance of the launching of Euro goes far beyond its economic dimension. Its introduction in 1999 became the main achievement of extremely high complex of political, legal, and technical process. Moreover, it sent a political signal to the rest of the world that Europe was able to take far-reaching decisions to define a common future for a continent which suffered a lot from wars and political instability.
The final stage of creating a single market system was the adopting of Euro. States have a freedom to choose whether they want to adopt the single currency. The Eurozone has a large economics; huge markets which became more liquid and homogeneous. Disappeared the risk associated with the exchange rates, costs were also …show more content…
Non-economic factors include: psychological and political advantages and disadvantages. The psychological advantages due to stability of domestic currency are a higher self-respect, and emphasized national identity. For those, who find political integration desirable, a Monetary Union could be a step closer to the political union. The advantages of being a part of Monetary Union can be devided in two groups: micro-economic and macro-economic advantages. Micro-economic advantages include: the improvement of micro-economic efficiency, the removal of transaction costs, elimination of exchange rate fluctuations, and an increase in foreign trade, effective capital allocation, growing competition, and price transparency. Macro-economic advantages include: elimination of problems that can arise from foreign currency instability, and low inflation due to independent European Central Bank, and having euro as the common currency (Kotilainen,
The significance of the launching of Euro goes far beyond its economic dimension. Its introduction in 1999 became the main achievement of extremely high complex of political, legal, and technical process. Moreover, it sent a political signal to the rest of the world that Europe was able to take far-reaching decisions to define a common future for a continent which suffered a lot from wars and political instability.
The final stage of creating a single market system was the adopting of Euro. States have a freedom to choose whether they want to adopt the single currency. The Eurozone has a large economics; huge markets which became more liquid and homogeneous. Disappeared the risk associated with the exchange rates, costs were also …show more content…
Non-economic factors include: psychological and political advantages and disadvantages. The psychological advantages due to stability of domestic currency are a higher self-respect, and emphasized national identity. For those, who find political integration desirable, a Monetary Union could be a step closer to the political union. The advantages of being a part of Monetary Union can be devided in two groups: micro-economic and macro-economic advantages. Micro-economic advantages include: the improvement of micro-economic efficiency, the removal of transaction costs, elimination of exchange rate fluctuations, and an increase in foreign trade, effective capital allocation, growing competition, and price transparency. Macro-economic advantages include: elimination of problems that can arise from foreign currency instability, and low inflation due to independent European Central Bank, and having euro as the common currency (Kotilainen,