European Studies Term Papers - Expansion of European Union

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The entire reason behind establishment of European Union is to maintain peace between the European counties, and to put them together. The founding gentlemen of the EMS wanted to reinstate the addition of the European Communities. In 1949, the Council of Europe was founder to endorse political and social unity in Europe. Economic integration and unity was brought to a head in March of 1957 when the European Economic Community and the European Atomic Energy Community were formed. These two treaties were used to help steady and form the ECU. All three of these organizations treaties were necessary to forming what is today called the European Union. (DeGrauwe, Paul)

The European Union/European Monetary System unsuccessful for three basic reasons in the early 1990’s. First of all, it failed because it was incompetent due to the low-inflation system and the recession in that time period. The depression complicated on the conflicts between the member countries of the European Union. Second, it is not adequately competitive at the current rate of exchange. Third, the real interest rate of the world would need to refuse radically in order for the EU to work. Also in the early 1990’s there were smaller prospect of devaluations. The current European Union has been a result of recent treaties.

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The first agreement that was signed in February 1992 helped the amalgamation of Europe be that much closer. It set the groundwork for one currency all through Europe called the euro. In order to update the current treaties the Amsterdam Treaty was signed as a result of the Intergovernmental Conference. This treaty resulted in a plan to listen to the citizens, get closer to a safer Europe, to make Europe more vocal all through the world, and to make the European Union more efficient. As of January of 1997 there were 15 countries belonging to the regional and economic European Union. The countries at present involved are Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

In the future the European Union hopes to nurture and add more countries to this list. European Union is also looking to bring the countries of Central and Eastern Europe into membership. This is powerfully supported by public view in the existing states; more than 60 % for bringing Hungary, Poland and the Czech Republic into the Union, and 55-58 % support for the memberships of Bulgaria, Slovakia, Romania and Slovenia. So far, however, only Poland and Hungary have formally applied for membership in the Union. The banking system that the European Union uses is a Central Banking System. With the evolvement of the Euro the economics of Europe will be easier to uphold. As of January 1, 1999 the national central banks and the European Central Bank were formed to help institute the monetary policy using the euro. The macroeconomics theory escorted with the use of economic analysis can illustrate the ideas at the back the EMS. The members of the EU have put a strong stress into the monetary and macroeconomic policies.

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In order to reduce inflation the tried to have more steady competitive conditions within in the EMS this resulted in strict exchange rates. The European Union has a long way to go before it achieves 100% success. It is updated on the whole on a year-to-year basis. In order to continue to improve the Union they have established an Agenda 2000. This agenda presents the major problems that they will meet as the year 2000 is approached. First, they want to strengthen and improvement the Community policies to deal with a growing European Union. Second, they require looking at the other countries that have applied to be a part of the Union. Last, a budget needs to be recognized that includes all of their future plans. There is much compensation to having a united Europe to the people of Europe. One benefit is trade. There is now a free movement of goods, services, people and, money inside the countries going to the European Union. Having a united Europe, which will result in the euro, will benefit information technology, administrative changes, and the information and training of employees.

The benefits of the EU on citizens, businesses, and tourists will be strong-minded by how much attention is paid by each exacting country to maintaining and promoting good relations with one another. American businesses are moving by the united Europe. For example, in 1980-85 there was an unpredicted increase in the value of the dollar. As a result of the dollar approval many American industrial firms that competed in the international market were more lucrative than in the past. The European Union also affects the business in the United States since the cash forward market liquidity tends to dry up in the middle of the afternoon because that is when the European currency traders are going home for the day. Investors in the ECU are growing on a daily basis. Investors tend look at the Union as a risk returning investment according to dollar assets and the foreign alternatives that are obtainable. (Giavazzi, Francesco, Stefano Micossi, and Marcus Miller)

 

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