European Union 3


Economic and Monetary Union (EMU) is a single currency area within the European Union single market in which people, goods, services and capital move without restrictions. It creates the framework for economic growth and stability and is underpinned by an independent central bank and legal obligations on the participating Member States to pursue sound economic policies and to coordinate these policies very closely.As trade between the EU Member States reaches 60% of their total trade, EMU is the natural complement of the single market. This market will work more efficiently and deliver its benefits more fully with the removal of high transaction costs brought about by currency conversions ...

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environment has been favorable in a number of respects for the transition to EMU and the achievements of its objectives. The strong demand for euro-area exports from industrial countries at more advanced stages of the business cycle and the depreciation of the currencies of euro area countries over the past four years fostered a strengthening of growth in the euro area and helped to offset the effects of the Asian crisis.
There are also challenges for EMU in the global economic environment:
 The crisis in Asia and other emerging market economies could produce adverse spillover effects and make the monetary policy more difficult to carry out.
 The continuation of the crisis could result in weakening of the external demand, which, in turn, could dampen confidence and domestic demand.
 The financial market volatility could increase the uncertainty in assessing the economic indicators.
 The economic crisis in emerging markets could influence the ...

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in coming years as the removal of cross-border currency risk drives pan-European markets.
 The Euro will stand alongside the dollar as the second-most-important currency in the
world, reflecting its coming role in global trade and finance as well as its common usage by 290 million Euroland citizens.
 The new central bank has been given the independence to pursue price stability as a
primary objective. This feature will affect the credibility of the ECB positively and thus the investors would see the Euro as a stable store of value in the next decade.
 Once the single currency takes effect, the national central banks of the euro area will
reduce their ...

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PAPER DETAILS
Added: 10/7/2004 11:42:59 AM
Category: World History
Type: Premium Paper
Words: 1856
Pages: 7

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