ВУЗ: Не указан
Категория: Не указан
Дисциплина: Не указана
Добавлен: 07.04.2021
Просмотров: 217
Скачиваний: 1
www.fh-joanneum.at
MANAGEMENT
A Single European Currency – A Debate
Prof. Vito Bobek
University of Apllied Sciences FH Joanneum
Applied Summer School
Business in Europe
www.fh-joanneum.at
MANAGEMENT
Key Issues
•
Why to have convergence criteria?
•
What are the basic effects of a single
currency?
•
What are the motivations for joining the Euro?
•
The case for EMU entry
•
The case against EMU entry
•
Optimal currency areas
•
Tensions for the single currency in 2009-2010
www.fh-joanneum.at
MANAGEMENT
Basics on the Euro
•
A single currency requires a
common interest rate
for the
Euro Zone – i.e. a common monetary policy
•
17 member nations
are inside the Euro Area
•
The
European Central Bank (ECB)
sets official interest rates
to meet an inflation target of 2%
•
The approach of ECB is different to that of the
USA Federal
Reserve
(dual target)
•
The US Federal Reserve tends to set interest rates to
maintain growth and avoid deflation.
www.fh-joanneum.at
MANAGEMENT
Euro Zone Interest Rates
Per Cent
Interest Rates for the Euro Area and for the UK
Source: Reuters EcoWin
99
00
01
02
03
04
05
06
07
08
09
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
P
er
ce
nt
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Bank of England Rates
Euro Zone Interest Rates
www.fh-joanneum.at
MANAGEMENT
Judging the Success of the Euro
•
The Euro project should be judged according to whether
it achieves its long term aims:
1. Sustained non-inflationary growth
2. Lower long-term interest rates and higher rates of
investment
3. Lower unemployment
4. Expansion of the EU single market
•
The Euro on its own in insufficient to achieve these –
structural economic reforms in Europe are also required
and many are taking place.