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The euro econ pres

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Ciara Kelly
Ciara Kelly

The euro began as an electronic currency in 1999, with notes and coins introduced in 2002. To participate, member states had to meet strict debt and deficit criteria. The euro sought to guarantee free movement within the EU and allow countries to trade more easily. While losing control over interest rates caused issues for some economies, the euro also increased competition and attracted multinational companies, benefiting countries like Ireland.

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Eimear Greene & Ciara Kelly
Plans for a single currency were first agreed in the Maastricht Treaty of 1992. The euro began life on January 1, 1999, when exchange rates with "legacy" currencies were irrevocably fixed. For the first two years of its existence, it was only an electronic currency used by banks. The creation of Euro was established in the Maastricht Treaty (1992). To participate in the currency, the member states had to meet some strict criteria as a debt ratio of less than 60% of their gross domestic product (GDP), interest rates close to EU average and a budget deficit of less than 3%. The first notes and coins were issued on January 1, 2002, when the euro became legal tender for all transactions in all 12 countries. The old national currencies were phased out over the next few months. [1]
1) Joining the euro introduced all euro zone countries to the European Union's (EU) internal market (sometimes known as the single market) and seeks to guarantee the free movement of goods, capital, services, and people the EU's "four freedoms" within the EU's 28 member states. This is good for Ireland as we can Trade our products with all other Euro zone countries whose population is estimated to be just over 500 million people. This is also good as well also do not have to relay mainly on the UK which we did in the past. [2]
Prices are made easier for people to deal with when they are in a foreign country as all the prices are the same as they are at home. It means less confusion for personal purchases and business deals. The Euro also made Europe a powerful player in the economy and the 2nd most important currency in the world after the Dollar. [3]
Having many countries with the same currency, companies have more competition with other companies in different countries which means they may make prices cheaper for their product than their comparators which is good for the consumer you get the best price for your product [3]
10 years leading up to the Euro all countries had to have: Low Interest and Inflation Rates Stable currency for 2 Years Good Govt Spending and low Govt Borrowing There was concern about the PIGS (Portugal, Italy, Greece and Spain ) but economies with this criteria were allowed join and this was viewed as healthy economies working together could be nothing but good. [4]
Some PIGS countries would devalue their currency so they would be viewed as cheap countries to do business with and this was not fair for competition. Joining the Euro zone meant this could not happen and business would be a fair trading ground [5]
Most big companies want a European base and being part of the euro was appealing to them as we all had a common currency. This helped Ireland attract FDI such as Facebook and Twitter. [6]
Joining the Eurozone meant that all countries lost the ability to control their own interest rates. Last Thursday (7th November 2013) The ECB (European Central Bank) cut the interest rates to a new record low. The rate was cut to 0.25% from 0.5%. This will means a saving of about 30 a month for a mortgage holder with a 250,000 home loan.
The move was a response to a slump in inflation way below the ECB target that has sparked fears the euro zone's economic recovery could stall. Not having control of our country's own interest rates can make it difficult for an economy to recover from financial depression. Not all countries suit the same rate at the same time. E.g. Greece and Germany.
http://euro-exchange.info/euro-history 2) The Single Market and Tomorrows Europe, Mario Monti, Kogan Page, 1996, pg, 77- 95 3) http://www.investopedia.com/terms/p/pricetransparency.asp 4) http://www.currencysolutions.ie/euro/the-euro-advantages-anddisadvantages-of-a-single-currency 5) http://www.historylearningsite.co.uk/euro.htm 6) http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-FO-12001/EN/KS-FO-12-001-EN.PDF 7) http://www.independent.ie/business/christmas-boost-for-homeownersas-ecb-makes-surprise-interest-rate-cut-29735112.html Information retrieved on (7/11/13) 1)

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The euro econ pres

  • 1. Eimear Greene & Ciara Kelly
  • 2. Plans for a single currency were first agreed in the Maastricht Treaty of 1992. The euro began life on January 1, 1999, when exchange rates with "legacy" currencies were irrevocably fixed. For the first two years of its existence, it was only an electronic currency used by banks. The creation of Euro was established in the Maastricht Treaty (1992). To participate in the currency, the member states had to meet some strict criteria as a debt ratio of less than 60% of their gross domestic product (GDP), interest rates close to EU average and a budget deficit of less than 3%. The first notes and coins were issued on January 1, 2002, when the euro became legal tender for all transactions in all 12 countries. The old national currencies were phased out over the next few months. [1]
  • 3. 1) Joining the euro introduced all euro zone countries to the European Union's (EU) internal market (sometimes known as the single market) and seeks to guarantee the free movement of goods, capital, services, and people the EU's "four freedoms" within the EU's 28 member states. This is good for Ireland as we can Trade our products with all other Euro zone countries whose population is estimated to be just over 500 million people. This is also good as well also do not have to relay mainly on the UK which we did in the past. [2]
  • 4. Prices are made easier for people to deal with when they are in a foreign country as all the prices are the same as they are at home. It means less confusion for personal purchases and business deals. The Euro also made Europe a powerful player in the economy and the 2nd most important currency in the world after the Dollar. [3]
  • 5. Having many countries with the same currency, companies have more competition with other companies in different countries which means they may make prices cheaper for their product than their comparators which is good for the consumer you get the best price for your product [3]
  • 6. 10 years leading up to the Euro all countries had to have: Low Interest and Inflation Rates Stable currency for 2 Years Good Govt Spending and low Govt Borrowing There was concern about the PIGS (Portugal, Italy, Greece and Spain ) but economies with this criteria were allowed join and this was viewed as healthy economies working together could be nothing but good. [4]
  • 7. Some PIGS countries would devalue their currency so they would be viewed as cheap countries to do business with and this was not fair for competition. Joining the Euro zone meant this could not happen and business would be a fair trading ground [5]
  • 8. Most big companies want a European base and being part of the euro was appealing to them as we all had a common currency. This helped Ireland attract FDI such as Facebook and Twitter. [6]
  • 9. Joining the Eurozone meant that all countries lost the ability to control their own interest rates. Last Thursday (7th November 2013) The ECB (European Central Bank) cut the interest rates to a new record low. The rate was cut to 0.25% from 0.5%. This will means a saving of about 30 a month for a mortgage holder with a 250,000 home loan.
  • 10. The move was a response to a slump in inflation way below the ECB target that has sparked fears the euro zone's economic recovery could stall. Not having control of our country's own interest rates can make it difficult for an economy to recover from financial depression. Not all countries suit the same rate at the same time. E.g. Greece and Germany.
  • 11. http://euro-exchange.info/euro-history 2) The Single Market and Tomorrows Europe, Mario Monti, Kogan Page, 1996, pg, 77- 95 3) http://www.investopedia.com/terms/p/pricetransparency.asp 4) http://www.currencysolutions.ie/euro/the-euro-advantages-anddisadvantages-of-a-single-currency 5) http://www.historylearningsite.co.uk/euro.htm 6) http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-FO-12001/EN/KS-FO-12-001-EN.PDF 7) http://www.independent.ie/business/christmas-boost-for-homeownersas-ecb-makes-surprise-interest-rate-cut-29735112.html Information retrieved on (7/11/13) 1)