The Future of the Euro
The European Union is the current talk in the world news and for great reason. Many of the nations that make up the union face large deficits and massive debts, while Italy and Greece owe more than they earn. If this situation is not handled correctly this crisis will not only affect the rest of Europe, but will potentially make its way to into the U.S. market. With Europe undergoing an economic depression, their monetary unit, the Euro, once one of the strongest currencies in the world could become obsolete to the global economy.
The Euro was brought to life on February 7th, 1992 when the Treaty of the European Union, also known as Treaty of Maastricht was signed (Maastricht). The treaty brought together eleven of the countries that make up the current Union and introduced a new monetary unit, the euro. The 1st of January 2002 saw the Euro coins and notes become official legal tender not only in the 12 initial EU-member Eurozone countries, but also in a number of smaller nations, dependencies and regions (Maastricht).
The euro was created under the belief that a common currency would enhance European solidarity and aid in achieving peace and prosperity in the region. Additionally, given that the majority of EU member nations' international trade is with other EU members, having a single currency eliminated exchange rate risks from internal markets, which cut the costs of transactions and facilitated businesses in trading across national borders. Trading and investment was thus expected to increase, leading to jobs and economic growth (Maastrich). With the euro taking the place of the currencies used by the countries in the European Union and forming one unit, it allows for higher trading in the world market.
Imagine that the dollar...