Free Euro Literature Review Essay Sample
The book by Andrew Martins and George Ross (2004) Euros and Europeans entitled the "monetary integration and the European model of society" introduces the Euro as a common currency that was introduced by the members of the European Union commonly referred to as the eurozone aimed at fostering monetary integration within the region. The book analyses the supranational institutions of the EU institutions. The author of the book also explores the how the EU economic policies have been able to safeguard member states from the effects of globalization. The other issue articulated in the book is the role of the EU institutions in shaping the social policies of the institutions. The book also explores various reforms undertaken to make the intutions policy rhyme with national variance among the member states. The authors also look at the roles of the EU institutions in helping member states address the issues of the economic insecurity. According to the book, the Euro replaced the traditional currencies of the member countries.
The currency is regulated through the European Central Bank (ECB) and is the currency used by the EU institutions. The bank, based in Frankfurt is one the key institutions of the European Union alongside the European Court of Justice (ECB). As the monetary regulator, the institutions have been granted great autonomy by the member states. The European Central Bank (ECB) is solely responsible for the monetary policies and regulates distribution and printing of euro notes and coins. The member states are obliged to meet some set monetary requirements before adopting the euro. The book further explains that the bank has gained a central place in the daily lives of the member states individual citizens regulating the economic undertakings in the member states. The influence of the European Central Bank has therefore extended to the labor markets in member countries. The regulation by the European Central Bank is depicted in the book as having greatly reduced the employers' power in the member countries.
The book traces the idea of the member states coming together to the Second World War predicaments that led to the growth of idea of bringing the European member states under common monetary and economic policies. According to the book, the aim of the architects of the early thought of integrating the European member states was the achievement of peace. The first strategy was therefore the achievement of economic related projects. The integration of European states could not be achieved without properly constituted institutions.
The first sign that common economic approach was possible was the Europe Steel and Cool Company (ECSG) founded in 1951. The introduction of the Euro was characterized by various negotiations dating back to the Rome Treaty of 1957 which was marked by significant concessions by member states in relation to agriculture and social policy. The 1957 Rome treaty incorporated Luxembourg, Belgium and France. Other members who signed the treaty were German, Netherlands and Italy. Latter, the countries adopted the single market program in 1986 as envisaged in the Single European Act, with an aim of withdrawing the tariff barriers. All these steps were given a lot of caution by member countries, concerned with their national capacities and social practices. Many member states were concerned with safeguarding compatibility of common market with the individual nation's devolvement plans. The common market was credited with increased inter-states trades. The common market was associated with the post-war economic boom in Europe.
Several initiatives were undertaken. These included the 1970 Werner Report. The Werner Report proposed stages that could culminate into achievement of the stipulated goals of the European Union member states. The Werner Report did not attain full implementations as there were drastic changes that occurred in Europe. Between 1970 and 1980, the timeframe set by the Werner Report; America undertook policies influenced by the Vietnam War. There was also internal inflation in Europe during this period. The Americans had also abandoned the Breton Woods hence the European Monetary policy was thrown into confusion (Martins & Ross, 2004: 4).
There have been questions on whether the monetary union embraced by the members of the European Union has achieved the intended positive results. In some spheres the introduction of momentary unions has been seen as posing threat to the European Social Model. The monetary union aim at achieving price stability is variously viewed as a predicament to increase in employment. The other likely predicament is conflicting member states interests which may create crises (Martin & Rose, 2004: 4).
The book by Martin and Rose advocates for further research and follow-up to ascertain whether Economic Monetary Policy will influence the intuitional change both in the short term and wrong term. The author also poses questions on how the EMU will affect members unwilling to be regulated and those planning to undertake retrenchment.
The book by Martins and Ross analysis the reconfiguration of the European social model. The book emphasis the role of design and operation in achievement of the monetary unions set objectives and goals the are directed to the member countries. The concern of the author is how the rejuvenation of the European social model will be achieved. The books analyses how the European Union commitment to price may have effect on the employment levels and keep them low. The authors also look at the influence of the interest pursued by the member states on the overall achievement of the union. The author identifies tension between the national models and the unions' models to the regional integration. The authors explore the role of the politics of monetary integration to the form that the union has adopted. The book also explores the varying wages in various European Union member states.
The book compares some member states wages in relation to the expenditure directed towards the welfare expenditures of a given state. The authors also compare the economic policies of different member states. The authors go further and introduce the concept on reantionalization and Europeanization. The authors look at the national systems that are part of the eurozone economy. The authors suggest further research on the implications of the Economic Monetary Union to the industrial relations of among the member states. The book addresses the issue of convergence in diversity. The authors look at the incentives that may drive the government towards the coordination of the European Union, sighting the challenges posed by competition. The other concern by the book is the effect of the European Union on the national bargaining of each an individual member states. The authors also look at the role played by numerous social pact signed by the member states. The authors look at the role of the trade unions whose Europeanization they perceive as they attribute to mastering social change. The authors' advocates for the needs of further research on the positive reasons for the European Union endeavor in making the necessary adjustments.
Global monetary governance
The book by Benjamin J Cohen entitled Global monetary governance duels mostly on the purpose of Economic and Monetary Union and other European Union institutions. According to the book, the Europe countries in early 1980s strived at achieving a price stable regime. The decision by French among other member countries to join the European Union led to formation of a commission headed by Jacques Delor in 1985 charged with the duty of putting in place measures that would facilitate what was at time referred to as single market by the year 1992. By 1987, the idea of a common currency had been envisaged in the in Europe Union monetary policy. The Delors report had been finalized by the year 1989.
The initial disagreements were overcome when the European Union member states created the European Monetary Union. The introduction of the Euro, according to the book was therefore heralded as the third and bold step towards the European integration. The member states aimed at protecting their economies from the instabilities in the global economies. The other aim was to improve the employment in Europe which was in decline, since 1980. By adopting common monetary policy, the member states would cater for the imaging needs for the member states.
The book explains that European Central Bank has the responsibility of making micro-economic policies. There are also numerous forums where the European Union member states can deliberate on monetary policy. Such forums include the European Commission. The other forum is the ECOFIN, where the finance ministers of the member states informally meet.
The book explains how the European Central Bank has strived to ward off infringement on its independence. The ECB strives to maintain price stability and decisions emanating from the Council must be vetted by this body. The ECB enjoys protection from the political machination. As an institution, ECB enjoys obsolute independence. It is charged with curbing inflation. The ECB has maintained one of the tighest monetary conditions compared to others of the industrialized world. The member states are bound by the Stability and Growth Pact (SGP) that regulates the fiascal policy. The SGP has ensures that the countries budget deficits are kept under control. The EMU member states are expected to practice restrains. The SGD has been associated with propagating ant-growth bias in terms of fiscal policy (Cohen, 254).
The author further outlines the achievement of the Economic Monetary Union. The 1990 liberation of capital market movement according to the book was one of the achievements of the Economic Monetary Union. The other achievement of common policy was the 1994 European Monetary Institute of 1994 charged with checking inflation level.
The author goes further to look as more advantages and disadvantages associated with Economic Monetary Union. According to the book, the introduction of the European Monetary Unification (EMU) has been associated with various advantages as well as disadvantages. There were numerous studies that suggested there EMU would yield a lot of direct benefits tot the member states. Among the anticipated benefits was the elimination of the transactions cost, according to a study undertaken in 1992 by Emerson and Colleagues. The other prediction on the likely gains was by the European commission in 1990, who predicted increase in intra-state investment in Europe.
The author goes further and evaluates the euro in terms of sustainability. The efforts of EMU were also faced by a lot skeptism when it came to sustainability economically. The Euro has however passed various tests with increased economic usage. The Euro seems to be competing with the dollar as the currency of dominance in terms of global usage. The International Monetary Fund developed a criterion for increasing the sustainability of the Euro. It suggested measures such as reducing the monetary deficits by the member states.
There has been an increase in the global prospects of the Euro according to recent estimates. The increased global prospects are in line with the improved Europe economic performance. The appreciation of the Euro against the dollar has not been accorded a lot of significance especially in the United States of America (USA). The confidence placed in the dollar by various players is likely to be an impediment to the rise of the Euro as the main currency in the global market. Where the euro will dislodge the dollar as the world leading currency is not something that can be easily predicted, with the former appearing in numerous worlds' transactions. The euro is used by about 327 million Europeans and some 175 million Africans (Adam, 2005: 35).
The euro has therefore continuously gained acceptance from the original 12 members who initially adopted it. The euro has been variously discussed by various theorists on the basis of monetary integration of the member states. Many theorists have strived to understand what the European integration is all about. Since there have been numerous integration theory, the Economic and Monetary Union has offered a good case study where theories of integration can be tested. The theories have tested the role of the governments in the integration process. The euro regulated through the European Central Bank is a case of the important role played by the intuitions and structures o the integration process. The states and the institutions play an important role in the monetary integration process. The European Central Bank is therefore an important supranational institution. Using the euro, the member countries hope to have successful exchange rate. The member countries also aim at using the euro to ward off any negative effect that may emanate from globalization and liberalization. The euro will help curb unwarranted monetary maneuver (Vardam, 2002: 5).
The consolidation of EMU has attracted Non-European states with broader pool of saving acting as an incentive. There has been an increase of the share of the euro in terms of the international stocks securities. Standing at 31% in 2004. The euro is therefore the currency that occupies position in terms of trade and currency reserve.
Ascendancy of the Euro by Benjamin Cohen
The other area of concern for cohen is the relationship between the dollar and the euro in terms of acceptance and usage in transactions. The euro is also compared with the Japanees yen and it comes out as a major currency in the world market. The currencies are therefore evaluated in terms of global circulation. The factors that are important in determining a currency global acceptance are discussed. The author assesses the strengths of the euro against the dollar. The author also asses the chances for the euro ascendancy as well as the obstacles or hindrances that may hamper the currencys' upwards ascendancy. The author explores the areas where the euro is like to gain more acceptance in terms of circulation compared to the US dollar. The author also examines the relationship between the circulation of the euro in relation to the increase in the EU membership.
The euro, in circulation since 1999 has many attributes for success. The EU makes an economy which as large as the United States. The region enjoys trade within Europe and outside. The euro, backed by the European Central Bank is owned by a bloc of members who experience relative political stability that is necessary for the currency acceptance globally. Many have predicted that there are prospects of the euro ascending to the top in terms of global circulation. The European Central Bank is committed to safeguarding the future of the euro by ensuring that he currency maintains value (Cohen, 262).
The ascendancy of euro is faced by many obstacles. The currency is likely to dominate the European region, and even spread to some areas like the Mediterranean and Sub-Saharan Africa. However, the euro seems to have been confined to this region where it has gained prominence as a currency of choice (Cohen, 262).
The growth of the euro has therefore, not been as many had predicted. The growth and the performance of the euro have been pegged on the increase in membership of the European Union. The currency influence will be increased with the increased membership. Some of the hindrances to the acceptance of the euro may include the cost of doing business using the euro. The transactions using the euro have been proven to be higher than in comparison with the dollar. The European financial market structural efficiency is therefore paramount to lowering the cost of doing business using the euro (Cohen, :252). .
To achieve increased EMU influence the membership has been expanded standing at twenty seven in 2004. The members are deemed to adopt euro as stipulated in the Maastrcht treaty of 1992. The member joining EMU are expected to retain price stability and curb inflation. The other conditions members have to meet is maintaining a stable interest rate and ensure fiscal stability. The member states also have to ensure a stable exchange rate (Gomis-Porquerrus & Roy, 109).
The euro can be said to play a great role in the geopolitics. As the states compete for territorial dominance, the globally acceptable currencies are become more and more prominent. The monetary policies have become important as the currencies compete in the global market. States are competing for acceptance of their currencies. The euro and the dollar are the dominant currencies that are in circulation. The new concept depicting geography of money and ensuing competition is a phenomenon that cannot be ignored. The dollar has however been the most used currency with high standing compared to all currencies including the euro. As a medium of exchange, the dollar has become acceptable in all corners of the world. This has given the United States significant economic advantage.
There are questions on whether the continuous dominance of the dollar can be challenged. This, according to some prediction will mainly be determined by government preferences and market competition. The euro, as a currency jointly owned by EU members is the only currency that can effectively compete with the dollar, since it has gained use globally. The other currency that is also used widely outside the country owning it is the Japanese Yen. Analysis however reveals that neither of the two currencies has shown sign of dislodging the dollar from the dominance position it has continuously occupied. The dollar has therefore continuously occupied the global market. The dollar dominance has been estimated at two fifth in terms of world international bonds and an estimated three fifth of the world foreign currency deposits in terms of international banking, the dollar is still the dominant currency. The dollar exhibits great circulation internationally. (Cohen, 255).
The euro seems to have replaced the German notes and it remains to be seen whether it will surpass the levels that had been acclaim by the German currency. The circulations of a states currency globally seem to have a lot of advantages. Such advantage is what the United States has enjoyed in terms of political and economic perspectives. The aim of the euro is to enable he member states benefits for reduced commodity prices due to low interest rates accrued from cross-bonder circulations. The member states of the EU also hopes to gain a flexible micro-economics policy by using the euro to finance foreign deficits. The EU members hope the euro will enable the member states achieve and curb currency deficit. The EU members hopes the currency will enable the member states enjoy the confidence accrued form the euro ones it gains significant global acceptance and even dominance. The euro is symbolic for the EU. It's a unique feature that will enable the member state gain an identity. The euro and the yen have gained recognition as the most serious challenge to the dollar. The greatest challenge to the euro is the market actors preference for the dollar. The dollar has continued to enjoy dominance due to what various actors see as stability of the country of origin (Cohen, 252).
The other major challenge to the euro in terms of ascendancy is lack financial institutions in Europe that are universal in nature. The universal financial institutions are a prerequisite for the euro to enjoy instrument that will rival the United States treasury bills. The European Union members lacks instruments to rival the US federal governments instruments .
The governance structure of the EMU has also come up as an obstacle to the euros prospects. There has been problem in terms of delegation of responsibilities to the EU institutions. It has been noted that although EMU leaves most of the fiscal policies in the hands of the members, on the other hand it greatly restricts the use of the euro. The euro has been heralded as a solution that may help curb the high level of unemployment among the member states and ease the rigid EU labor markets. The EU institutions are however formally controlled by the member states. The individual countries social-economic policies have from time to time influenced the monetary policies of the EU.
Several theories have been used to explain the interrelationships between the member states. One of such theory advances the European social model that primarily addresses the issues of the labor market and the social interdependent. The model explains the citizens' obligations towards each other. The members relate to each other through the market transactions. The EU institutions are politically constructed by the member states. The member states internal monetary policies and market mechanism play significant role in the inter-states relationships.
The other obstacle to the euro that some European countries have requested exception while others have while others have deliberately failed to meet the budgetary and monetary requirement set by the European Central Bank in order to adopt the euro. There is also implication of the differences in the inter-countries financial and even financial structure that have affected the growth of the euro. The member countries have experienced the effects of monetary policy structurally. The monetary policies practiced by the European Central Bank have therefore had influences on the member states.
The Politics of the Euro-Zone: Stability or Breakthrough? By Kenneth Dyson,
The books main concern is how the Euro is used and the role the currency plays in Europe. The other concern is the use of the euro or the role it plays in the economy of the member states. The other concern is the institutions that regulate the euro. The problems experienced in the euro zone are also discussed in the book as well as the opportunities that are available for the euro. The book also addresses the policy issues of the euro-zone. To understand the issues related to the Euro-Zone, the book addresses explores the political development of the European Union. The author relates the birth of the euro-zone to the collapse of the Breton System in 1973. The author gives a chronology of events presiding the introduction of the euro by the member states of the European Union.
The author explains how currencies of 11 member states were the basis for the introduction of the euro. The author explains how it was anticipated that the euro would eventually replace the member states currencies. The author also explains the central role played by the Bundesbank as the anchor for the other currencies within the EU region. The author further explains the role played by the euro on the economy of the member countries. The book explores the structural reforms aimed at promoting social cohesion in Europe. The book explains how the firms in member states moved in and exploited the opportunities created by the European Union, despite the divergent policy ideas advanced by various member states. The author explains how institutional deficiencies have affected the operations of the euro-zones. The author also explains how the external elations have been affected by the euro having become a common currency for the European Union member states. The author has also explained how the institutions in what he refers to as Euro-Zone operates
After studying the three books, I have drawn conclusion that there is need for further research. There is need to asses how the expansion on the use of the euro can be undertaken without hurting the individual countries economy. There is also need for research on how new member states can make fiscal adjustment without hurting their economy and labor market. The specific steps that a country has to undertake before adopting the euro needs to researched on. There is also needs to carry further research on the role of various institutions that are involved in the use and regulation of the euro.
The other area that needs further research is the comparison between the euro and the dollar. There is also need for further research on how the euro is prepared to take a wider responsibility as far as international trade is concerned. There is also need to look at how stability can be achieved.
Comparing the three books, the book by Andrew Martins and George Ross (2004) Euros and Europeans entitled the "monetary integration and the European model of society" comes out as the book that have addressed the issues of the euro in the best way though all the three books have touched various aspects of the euro as explained in the foregoing literature.