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" During the third and final stage, the European Central bank would be in operation. According to the agreement, this was to occur no later than 1999 and for three years thereafter Euro coins and banknotes would be issued (Eichengreen and Frieden).
By 2002, the Euro had been implemented as the single currency for member states. However, the implementation and consequent use of the Euro appeared to be a bit rocky. According to an article found in the journal Challenge, the value of the Euro had fallen slightly. The author blamed this fall on the central bank and its efforts to shore up the Euro (Bibow). The author contends that this unrelenting support stifled economic growth. According to the article
Between the start of 1999 and October 2000 the euro lost some 20% of its initial external value (even 30% vis-a-vis the U.S. dollar). After a brief rebound toward the end of 2000, the euro fell back close to its historical trough and dangled around $0.85 by mid-2001. Among other things, pronounced euro weakness pushed up prices in the eurozone. Consumer price inflation has quadrupled since the euro's inception (accelerating from 0.8% in January 1999 to 3.4% in May 2001). (Bibow)"
The article reports that the creation and implementation of the Euro into the market was not a simple transition. The author explains that some member states, most notably Germany, were already having difficult economic times (Bibow). The author asserts that the poor economic condition of Germany was another prime reason for the fall the Euro. The article reports that between 1992 and 1995 the real domestic growth of Germany only averaged 1.5% (Bibow). In addition, there were high levels of unemployment (Bibow). The article explains that to combat this problem Germany developed a tight-money policy (Bibow). This policy was not a sound economic policy and resulted in the further demise of the German economy. As a result, the German company lagged behind as America's and the economies of other nations soared (Bibow).
Although initial estimates of how well the Euro would perform...
An article found in the Washington Times asserts that although many citizens if member states were apprehensive about the new currency, the Euro were embraced (Martin). The author asserts that the Euro quickly grew against the dollar. In addition, the central bank reported that more notes were put into circulation than had been expected (Martin). The article explains "We have been surprised," said Peter Walter, a senior official at the Bundesbank. "It seems people are really anxious to get the notes in their hands and feel them."(Martin)
Conclusion
The purpose of this paper was to define and discuss in detail the concepts and ideas of the single European Market. We found that the market was created to stabilize exchange rates and the economies of the member states. We also found that the preliminary estimates for the price of the Euro against the dollar were low. Our investigation suggests that in time the currency gained in popularity and became competitive with the dollar. Ultimately the single European market has proven successful for the European continent and the world economy.
Works Cited
http://www.questia.com/PM.qst?a=o&d=5000762932
Bibow, Jorg. "The Euro: Market Failure or Central Bank Failure?." Challenge 45.3 (2002): 83+. Questia. 12 Oct. 2004 http://www.questia.com/. http://www.questia.com/PM.qst?a=o&d=86000865
Eichengreen, Barry. "1 the Political Economy of European Monetary Unification an Analytical Introduction." The Political Economy of European Monetary Unification. Eds. Eichengreen, Barry and Jeffry a. Frieden. Boulder, CO: Westview Press, 2001. 1-22. http://www.questia.com/PM.qst?a=o&d=8922274
Fratianni, Michele, and Jeurgen Von Hagen. The European Monetary System and European Monetary Union. Boulder, CO: Westview Press, 1992. http://www.questia.com/PM.qst?a=o&d=5000680555
Martin, Paul. "Euro-Phoria?." The Washington Times 3 Jan. 2002: 8. Questia. 12 Oct. 2004 http://www.questia.com/.
Works Cited
http://www.questia.com/PM.qst?a=o&d=5000762932" target="_blank" REL="NOFOLLOW">http://www.questia.com/PM.qst?a=o&d=5000762932
Bibow, Jorg. "The Euro: Market Failure or Central Bank Failure?." Challenge 45.3 (2002): 83+. Questia. 12 Oct. 2004 http://www.questia.com/. http://www.questia.com/PM.qst?a=o&d=86000865
Eichengreen, Barry. "1 the Political Economy of European Monetary Unification an Analytical Introduction." The Political Economy of European Monetary Unification. Eds. Eichengreen, Barry and Jeffry a. Frieden. Boulder, CO: Westview Press, 2001. 1-22. http://www.questia.com/PM.qst?a=o&d=8922274
Fratianni, Michele, and Jeurgen Von Hagen. The European Monetary System and European Monetary Union. Boulder, CO: Westview Press, 1992. http://www.questia.com/PM.qst?a=o&d=5000680555
Martin, Paul. "Euro-Phoria?." The Washington Times 3 Jan. 2002: 8. Questia. 12 Oct. 2004 http://www.questia.com/.
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