scholarly journals Nominal and Real Convergence as a Determinant for Joining the European Monetary Union

ECONOMICS ◽  
2017 ◽  
Vol 5 (1) ◽  
pp. 52-71
Author(s):  
Merim Kasumović ◽  
Erna Heric
Keyword(s):  
Central Bank ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Central Bank ◽  
Financial Integration ◽  
Convergence Criteria ◽  
European Monetary ◽  
European Central ◽  
Real Convergence ◽  
The Stability

Summary The thematic framework of this work is the nominal and real convergence as a determinant for joining the European monetary union. The focus of the work is to prove that realising the criteria of the convergence affects the stability of the European monetary union, that is, that the cause of destabilisation is exactly the fact that certain member nations have not realised the assigned convergence criteria. The financial integration is an important question because it contributes to the economic growth affecting free exchange with the goal of a more efficient allocation of capital; it is the result of the economic theory and the empirical research. Introducing the Euro as a single payment method while losing the monetary sovereignty of the countries which have accepted it is the main reason for forming the European Central Bank. The mission of the European Central Bank is to define and conduct a single monetary policy within the Eurozone. Because of the already mentioned facts, the challenges of conducting the fiscal policy within the Eurozone as well as the key aspects of the monetary unification of Europe have been analysed. The results of this analysis should point out the stability of the EMU by the convergence degree of the member nations from a single monetary area.

scholarly journals The Stability Pact: Safeguarding the Credibility of the European Central Bank

1998 ◽  
Vol 163 ◽  
pp. 87-98 ◽  
Author(s):  
Michael Artis ◽  
Bernhard Winkler
Keyword(s):  
Central Bank ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Central Bank ◽  
Policy Coordination ◽  
European Monetary ◽  
Fiscal Discipline ◽  
European Central ◽  
Stability Pact ◽  
The Stability

The ‘Stability Pact’ agreed at the Dublin Summit in December 1996 and concluded at the Amsterdam European Council in June 1997 prescribes sanctions for countries that breach the Maastricht deficit ceiling in stage three of European Monetary Union. This paper explores the central provisions and possible motivations of the Stability Pact as an incentive device for fiscal discipline and as a partial substitute for policy coordination and a common 'stability culture’.

scholarly journals The European Central Bank, the Euro, and Global Financial Markets

2006 ◽  
Vol 20 (4) ◽  
pp. 67-88 ◽  
Author(s):  
Kathryn M. E Dominguez
Keyword(s):  
Central Bank ◽  
Financial Markets ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Central Bank ◽  
Maastricht Treaty ◽  
European Monetary ◽  
Wide Margin ◽  
European Constitution ◽  
European Central

The economic case for European monetary union was shaky at best when it was first discussed 35 years ago. Europe's leaders felt that monetary union was the capstone to their efforts to create an integrated Europe, and much to the rest of the world's surprise, they succeeded. The introduction of the euro and the establishment of the European Central Bank (ECB) as the monetary authority of Europe went much more smoothly than many predicted. But nagging doubts about the wisdom of integration persist. The slim margins by which the Maastricht Treaty passed and the wide margin on which the European Constitution failed are reminders that Europeans are still wary of giving up their national sovereignty. This wariness also influences the ability of the ECB to efficiently take over monetary policy and limits the ability of the euro to become a true rival of the dollar in global financial markets.

scholarly journals ‘Banks 1 – Portugal 0’? Financial player entanglements in the Eurozone crisis

2020 ◽  
pp. 102452942096473
Author(s):  
Victoria B-G Stadheim
Keyword(s):  
Central Bank ◽  
Crisis Management ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Central Bank ◽  
Exchange Rate Regime ◽  
Political Agency ◽  
Monetary Integration ◽  
European Monetary ◽  
European Central

The euro has been at the heart of the debate about the crisis in the Eurozone. For some, it represents a fixed exchange rate regime, which hampered peripheral countries’ competitiveness, and for others, the European Monetary Union has a ‘flawed institutional design’ and an insufficient degree of integration that engendered the crisis. The present article analyses monetary integration from a materialist perspective. It draws attention to political agency, power and crisis management. The article focuses on the case of Portugal and poses the question of how the country's authorities were compelled to request a rescue package from the International Monetary Fund, the European Central Bank and the European Commission in 2011. It shows that this decision was triggered by the political agency of a series of players within the world of finance, most notably Portugal’s domestic banks, the independent Bank of Portugal and the European Central Bank. Reflecting their material interconnection through the European monetary system, their agency was highly coordinated. The strategies for crisis management that came to deepen the recession were not the result of insufficient European integration – they rather reflected Portugal’s form of integration within the European Monetary Union at the specific moment of crisis.

scholarly journals The Euro And The European Debt Crisis

2013 ◽  
Vol 13 (1) ◽  
pp. 103
Author(s):  
Douglas Castleberry ◽  
Balasundram Maniam ◽  
Geetha Subramaniam
Keyword(s):  
Financial Crisis ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Central Bank ◽  
Debt Crisis ◽  
Domino Effect ◽  
European Monetary ◽  
European Central ◽  
History Of ◽  
Set Up

This paper studies the history of the Euro leading up to its inception, what happened after the Euro was introduced into circulation and implications for its future. The Euro was set up to accommodate a unified currency while preserving sovereignty among nations who, less than a century ago, were mortal enemies. Preserving sovereignty weakened the ability to respond to crisis by design, and it wasnt long before the limits of the European Monetary Union were tested after a series of financial crisis threatened the very existence of the Euro. The Euro held together, yet the inability of the European Central Bank to assist member nations control subsequent debt following the financial crisis may wound the ability of the Euro to replace the dollar as the dominant world currency or even prove fatal. Greece is on the verge of collapse, and is so entangled with other Euro nations; a systemic domino effect will occur should any of the troubled member Eurozone nations collapse uncontrollably. Three options remain for the European Monetary Union, banding together and preserving the currency, grossly indebted countries exiting to preserve the health of countries which are more fiscally responsible, or the Euro may land inconsequentially between success and failure, never challenging the power of the dollar as the dominant world currency.

scholarly journals The Announcement of Unconventional Monetary Policy and the Exit Risk in the European Monetary Union

2018 ◽  
Vol 10 (4) ◽  
pp. 95 ◽  
Author(s):  
Paolo Canofari ◽  
Alessandra Marcelletti ◽  
Giovanni Piersanti
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Central Bank ◽  
Monetary Union ◽  
European Monetary Union ◽  
Unconventional Monetary Policy ◽  
European Monetary ◽  
Opt Out ◽  
Union Model ◽  
The Stability

The introduction of unconventional monetary policy, pushing down the euro value, aims at strengthening the euro area, by increasing its competitiveness and boosting its economic growth. The goal of our paper is to offer a theoretical validation of these facts using a monetary union model in which a representative country and a common central bank strategically interact. The country can choose to stay in or opt out from the monetary union after a demand shock, while the central bank controls the exchange rate to preserve the stability of the union. Our main result is that the announcement of common exchange rate depreciation reduces the probability of a monetary union breakup.

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