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Euro Currency - Essay Example

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The single currency proposes great opportunities for the states to improve their internal economic and political operations and protect their economies. This transformation of western European capitalism is reflected in the process of European integration as it experienced from the mid-1980s with the Single European Act (SEA) and the treaty of Maastricht, paving the way for the completion of the internal market and monetary union respectively.
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Euro Currency
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Download file to see previous pages Free trade is one of the main benefits of euro. With this 'relaunching', the European integration process has become increasingly biased in favor of deregulation and the free play of market forces, establishing the primacy of negative integration (market liberalization) over positive integration. European integration thus has come to be bound up with a restructuring of Europe's socio-economic order (Barnard 2007). The acceleration of European integration on the one hand, and the rise of neo-liberalism in Europe on the other, have become intertwined inasmuch as the relaunching of Europe went hand in hand with the reconstruction of the post-war order of European capitalism along predominantly neo-liberal lines. The free market has always needed the state for both its emergence and its maintenance. In political economy, the market is not a 'spontaneous order' (Barnard and Scott 2002), but rather a social and political construction, hence, in this sense, as is also stressed by the new institutionalism in economic sociology, the economy is always embedded in society (Barnard and Scott 2002).
Euro is defined as a single European accounting currency and an official currency of the European Union. "The role of the euro as an international investment currency, anchor currency and reserve currency is inseparably associated with its internal stability" ((Barnard and Scott 2002, p. 54). Today, this is an official currency 15 Euro states and Eurozone. Euro was introduced in 1999, but practically launched only in 2002. Critics admit that: "the euro has a good chance of becoming a lastingly stable currency, respected by the markets and the population alike. Domestic stability is at the same time the best contribution the euro can make to a sound, viable and stable global financial system in which the financial market players can act in a spirit of responsibility" (Barnard and Scott 2002, p. 54). The advent of a single European currency, alongside enlargement and the growing international role of the EU, as codified in the SEA, TEU and Amsterdam Treaty, gives rise to questions regarding the type of actor the EU constitutes for external partners at the start of the twenty-first century. In this respect, debates over the EU's future parallel some of those which preoccupy Japan in the post=Cold War world.
Euro makes possible a higher level of competition for the EC as well as increases its economic growth and ability to face international competition. Clearly, the EC's internal market is also affected by the scope of its commercial transactions. Compared to the United States and Japan, where international trade accounts for only 6 and 13 percent of the GNP, foreign trade is much more important to the economies of the EC (Bieler and Morton 2001). Besides, the internal market reinforces the significance of trade between the members, which is already around 55 percent of the Community's foreign trade. This increase of the EC's foreign trade results in a double ...Download file to see next pagesRead More
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