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Particular policy debate - Essay Example

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This topic is chosen as an example of discussion going through on international platform. Before going into details of the actual problem, it is useful to give the introduction about European Monetary Policy and…
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Particular policy debate
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Download file to see previous pages ECB is assigned the task of maintaining price stability and it is the major component of Euro-system. The fate of Euro-zone is the topic of debate on international forum.
European Union is commonly known as EU, a supranational body which proposed integration of European countries. It adopted a unique framework for integration and set the goal of complete integration among European countries. By complete integration, EU meant to integrate the economies, politics, educational, cultural and all other aspects.
By economic integration, the EU dreamt of common market and common currency. The common market was based on the idea of free movement of goods, services, capital and labour (Toner, 2004). By free movement means, there were no tariff and quota restrictions, there was no excise duty and the exchange rate was relatively kept stable. In order to go a step ahead in economic integration, the common currency named as Euro was introduced. The member countries were required to abolish their local currency and adopt Euro as the official currency. Adoption of Euro is a difficult task for the member states and they need to make certain changes in their economic system to adopt this new currency.
The fate of Euro-zone is important to determine because it is one of the most important key performance indicators of ECB and EU itself. EU has achieved many successful milestones in its earlier periods of economic integration. The common market initiative was warmly welcomed by the member states and in order to reap its benefits, many other European countries showed their willingness to join EU.
When EU launched the initiative of common currency i.e. Euro, few countries showed enthusiasm while UK, Denmark and Sweden adopted the opt-out option. This option relieved them from the mandatory requirement of replacing their national currency with Euro. It has raised much confusion in the economic circles of EU. Many other ...Download file to see next pagesRead More
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