The reserch paper on The Euro Crisis Essay Example | Topics and Well Written Essays - 4000 words

The reserch paper on The Euro Crisis - Essay ExampleThis vulgar national currency Euro is utilised by over three hundred million people in the worlds most developed economic region, which is considered as a record in the international monetary system. The common currency Euro was stooled by the European nations with the objectives of acquiring better integration among member nations as well as to enhance the currency value in the global economy (Feenstra & Taylor, 2012). In the year 1999, frugal and Monetary Union (EMU) was also established with the motive of utilising the single national currency i.e. Euro for all the heap activities performed by the European nations. In the starting of 2002, there were 12 countries in Europe Union (EU) which include Ger many an(prenominal), Austria, Belgium, Ireland, Finland, Italy, France, Greece, Netherlands, Spain, Luxembourg and Portugal that utilised Euro as their national currency. subsequent on many countries also joined EU and adopted Euro as a national currency. However, three EU member countries namely Sweden, United demesne and Denmark do not used Euro as their national currency. By the year 2010, there were 27 countries as members of EU. In Euro zone, the main objective of EMU was to establish a common monetary currency for EU members and to coordinate the monetary affairs of the member nations through European Central Bank (ECB). The euro zone has face financial crisis due to sluggish economic growth as well as high rate of underemployment. Moreover, economic recession of 2008 has also raised many economic problems in the European nations (Arestis & Sawyer, 2012). Considering this aspect, the review pass on emphasize on the factors accountable for crisis in the European nations. The objective of the review is to recognise the reasons for Euro crisis. Moreover, review will also focus on remedies necessary for minimising the effects of Euro crisis in the European nations and other countries. The review inc ludes other aspects related to the Euro crisis along with economic problems faced by the European nations. Background The Euro system of the European countries consists of ECB and 11 central banks of different nations. The Euro system has four major caprioles with respect to economic growth and sustainability. The first job is to execute the monetary strategies implemented by Central Council of ECB. The second job is to undertake foreign exchange functions and the third job is to maintain money reserves of euro area nations. The Euro system is responsible for coordinating as well as managing monetary policy of EU. Euro was considered as a single common currency by EU members with the objective of acquiring a stabilised price for a long period of time. Moreover, with common currency it was expected that it would help to expand the commercialize and also would assist in better integration of capital, goods and service. Furthermore, it was anticipated that with the introduction of co mmon currency, Euro would be an important currency relating to foreign exchange markets (European Central Bank, 2009). Economic and Monetary Union (EMU) EMU was set up with the motive of stabilising the monetary operations as well as for prosperous economic organic evolution of the European nations. The vision of EMU is to develop an integrated framework for the financial sectors which enables the banking