||Economic & Market Considerations: Money and Exchange Rates
The European Union was forged to foster greater trade and interdependence between the countries of Europe and has continually tried to break down barriers to trade between the member states. However, barriers to trade are many and varied. They include tariffs and subsidies, but they also include rules and regulations, transportation costs and currency transaction costs. The European Union, like its previous incarnations, has strived to break down these barriers since its formation. The Single European Act was an important stage in the process - harmonizing regulations across the union, and paving the way for a single currency, which was introduced on January 1, 1999. On that date eleven of the fifteen countries in the EU entered into Economic and Monetary Union (EMU) and adopted a single currency, the euro, to replace their national currencies. Greece joined the single currency in January 2001. The euro notes and coins were introduced and national currencies were withdrawn from circulation in January 2002. Slovenia joined in January 2007; Malta and Cyprus in January 2008.
- Why a Single Currency?
- Benefits of a Single Currency
- Transaction costs
- Economic policy
- "One size fits all" interest rate
- Structural reforms and new institutions
- The UK's Opt-Out