The EU: Economic and Financial Aspects

EUROPEAN UNION : Economic and Financial Aspects

2006

European Union : Economic and Financial Aspects

1 . Introduction

I have come across the term strategy ' at various occasions ranging from match-ups in English Premiere League , military attack on Iraq last year to the latest beauty contests like miss world in China a few months ago . All need strategy to win a battle ' for each occasion . It is obvious that strategy ' has a deep meaning that just a way to reach or accomplish a thing

In Strategy : Definitions and Meaning , Fred Nickols says , the

concept of strategy has been borrowed from the military and adapted for use in business . In business , as in the military , strategy bridges the gap between policy and tactics

What , then , is strategy ? Is it a plan ? Strategy is all these - it is perspective , position , plan , and pattern . Strategy is the bridge between policy or high- goals on the one hand and tactics or concrete actions on the other . In short , strategy is a term that refers ideas insights , experiences , goals , expertise , memories , perceptions , and expectations that provides general guidance for specific actions in to achieve specific results

In compliance with general meaning of strategy , in this , we would like to discuss underlying strategy of the formation of European Union (EU ) that rules out the single currency within the twelve member countries : Belgium , Germany , Greece , Spain , France , Ireland , Italy Luxembourg , the Netherlands , Austria , Portugal and Finland

The Birth of Euro

The Euro is the currency of twelve European Union countries , ranging from the Mediterranean to the Arctic Circle . The twelve counties are Belgium , Germany , Greece , Spain , France , Ireland , Italy , Luxembourg , the Netherlands , Austria , Portugal and Finland

History of Euro began on 1 January 1999 when eleven European Union countries (later to become twelve ) established the conversion rates between their respective national currencies and the euro and created a monetary union with a single currency , giving birth to the euro However , Euro banknotes and coins were first in circulation commencing 1 January 2002 and are now a part of daily life for over 300 million Europeans living in the euro area

Jean-Claude Trichet , President of the European Central Bank , says within the first five year since the birth of single currency , Euro , and a monetary policy conducted by the Eurosystem , consisting of the European Central Bank and the national central banks of the euro area has successfully proven the sceptics that Euro is a stable currency Several interesting findings that back up this notion are as following

The euro area has witnessed a period of low rates of inflation and low levels of long term interest rates . Most countries have had their lowest market interest rates for decades

The introduction of the euro , first , in book-entry form , and , second , in the form of banknotes and coins went very smoothly

The euro has become part of people 's daily lives since Euro has successfully maintain price stability within the member countries

Price stability becomes siginificant factor for the success of...