Enter Task

Faculty:

Study area:

Subject:

Section:

Type:

Curriculum:

Sequence:

Title:

Wording:

Time:

hours

Introduction:

<p style="text-align:justify"><span style="font-size:14.0pt">In 1999 decided 17 member states within the EU to introduce a common currency, called the Euro, in their respective countries as an attempt to achieve further economical integration. The 17 countries established the so-called Eurozone, within the EU, and initiated also the European Central Bank. The last 10 of the 27 member states in all decided to stay outside the common currency of various national reasons.</span></p>

<p style="text-align:justify"><span style="font-size:14.0pt">Economic cooperation is the basic reason behind the EU project.&nbsp; A more integrated economy within the EU member states is expected to make the economy in general stronger e.g. seen in the light of the global competition with the USA and the BRICS countries. A common currency was meant to improve the conditions for the mutual trade, create an international currency of importance and make economic transactions easier and cheaper between the member countries. One example: No taxes, no bureaucracy while changing the currency transferring money from one country to another in matters of finance and trade. In the years after the introduction the Euro came closer and closer to the US dollar as a preferred global currency. </span></p>

<p style="text-align:justify"><span style="font-size:14.0pt">From 2008 with the beginning of the financial crisis there have been problems within the Euro zone. Especially the countries in southern Europe, Greece, Spain and Portugal, and also Ireland, have shown to have big financial and debt problems. The problems are dealt with, so far, by demands of huge costs in the national budgets, and financial support, transfer of money, from the rich countries in the Euro zone and the IMF to the involved countries. Ireland seems on the way away from the debt trap. Especially Greece and Spain still face severe problems. </span></p>

<p style="text-align:justify"><span style="font-size:14.0pt">There are discussions going on what has caused this situation in the Eurozone. The problems, as was the financial crisis, were not foreseen as claimed by the national sectors involved. It was known there were big differences in the economic potentials and competitive capacities between the rich countries and the poorer ones within the Eurozone, and though they were put in the same financial set up. There have been a massive speculation in the involved countries; the main financial institutions, and in Greece also the state, have lost a huge amount of money because of speculation, and they need governmental support to continue. &nbsp;The discussions of how to get out of the crisis is also on-going and fluctuates mainly between emphasising massive cuts in the budgets or stimulate the economy to generate growth</span></p>

<p style="text-align:justify"><span style="font-size:14.0pt">One of the discussions following this situation is the often outspoken need of more political integration, more federation, to secure an economical integration with a common currency. It could be a political union or at lest federal institutions, who can monitor the national economies and have a say towards observed unbalances. Unbalances like the mentioned could eventually be solved on national level by the help of devaluation, a diminishing of the value of the currency compared to the ones of the creditors. It would make it easier to pay back the debt, improve the conditions of the export and get out of the debt situation faster. So did Sweden get out its debt trap in the 1990es. In the Eurozone it is not possible for a single nation to devaluate. It is also impossible to see how to leave the Eurozone if wanted.</span></p>

<p style="text-align:justify"><span style="font-size:14.0pt">Whether a common currency is a beneficial economic project, whether there have to be more political integration, more federal institutions to support the economic &nbsp;integration, it is clear that someone have to pay. The creditors want their money. The financial institutions, which caused the financial crisis, are necessary in the economical structures and have received massive financial support. They have now become the creditors with a creditor&acute;s demands. The states in the debt trap must live up to tough demands for cuts and high interests from these creditors. </span></p>

<p style="text-align:justify"><span style="font-size:14.0pt">There is a huge transfer of money to international and national creditors from the states and &ndash; in the end - the people. They are the ones to pay, whether it is the people in the debt countries experiencing the cuts in services and unemployment, or the people in the creditor nations give loans to the debt countries. Europe as such suffers at the moment from a lack of economic growth and severe unemployment. The Euro zone is also exposed to a lack of confidence from the creditors. The budget deficit in the USA and Japan are much higher than in Europe, but they do not suffer from the same pressure from the creditors as especially the Southern Europe. The international creditors so far mistrust the political ability of the Eurozone.</span></p>

<p style="text-align:justify"><span style="font-size:14.0pt">Is the situation above caused by specific historical circumstances right now, or is it a result of a kind of systemic mistake in the making of the common currency because there were not equal conditions for the countries entering the Euro? Is it possible to make a stable Euro by more political integration? Will the national states transfer more sovereignty to EU? Will the people? Will the people accept to pay for actions taken by EU and without their direct influence? Or actions from the financial institutions? Is the Euro subject to massive speculation from the international creditors? Is/was the Euro a good idea?</span></p>

Directive:

<div>The aim and the product of the task are related both to the title, the introduction and the directives.<br />
Read the introduction and the related issues and make clear the overall aim.<br />
Relevant files are added. Use additional sources if you find it beneficial. The origin of additional sources must be noted for control.<br />
<br />
Products:</div>

<div style="margin-left: 40px;"><br />
1. Make a speech, presentation for your colleagues</div>

<div style="margin-left: 80px;">Title: The Euro &ndash; a god idea, or not? About why it was created, about its history,<br />
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;and why it is now necessary to make special arrangements to save it.</div>

<div style="margin-left: 80px;">Include the issues mentioned below.</div>
&nbsp;

<div style="margin-left: 40px;">2. &nbsp;Write 2 pages with your answers and arguments about the title of the task and</div>

<div style="margin-left: 40px;">&nbsp; &nbsp; &nbsp;including the listed issues.</div>
&nbsp;

<div><br />
Related issues to include in the product:</div>

<div style="margin-left: 40px;"><br />
1. &nbsp; &nbsp; What is a national currency, how is its value decided, and how are national<br />
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;currencies usually traded. What is devaluation and revaluation?<br />
<br />
2. &nbsp; &nbsp; What were the arguments for a common currency and what were argued<br />
&nbsp; &nbsp; &nbsp; &nbsp; against it? Why were Germany and France in front establishing the Euro, and<br />
&nbsp; &nbsp; &nbsp; &nbsp; Great Britain not a part of this?<br />
<br />
3. &nbsp; &nbsp; How has the history of the EU been towards the US dollar from its start until now?&nbsp;<br />
&nbsp; &nbsp; &nbsp; &nbsp; Has the Euro been beneficial for the Eurozone - in which way yes, or in which way<br />
&nbsp; &nbsp; &nbsp; &nbsp; not?<br />
<br />
4. &nbsp; &nbsp; What are some main discussions behind why there has developed a debt crisis in<br />
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;southern Europe and not that much in northern Europe?<br />
<br />
5. &nbsp; &nbsp; Seen from the perspective of the people in the Eurozone: What have been the<br />
&nbsp; &nbsp; &nbsp; &nbsp; benefits from the Euro and what have been the disadvantages?<br />
<br />
6. &nbsp; &nbsp; How will the Eurozone overcome the current debt crisis and gain confidence on<br />
&nbsp; &nbsp; &nbsp; &nbsp; the financial markets? Why is political integration necessary as claimed at the<br />
&nbsp; &nbsp; &nbsp; &nbsp; moment? Why did the involved states not start with the political integration before<br />
&nbsp; &nbsp; &nbsp; &nbsp; presenting a common currency?<br />
<br />
7. &nbsp; &nbsp; Look ahead and try a prediction: What will be the situation in ten years for the<br />
&nbsp; &nbsp; &nbsp; &nbsp; Euro and the member states in the Eurozone? What are your arguments?<br />
&nbsp;</div>

Preview:

Files:

Requirement:

No.

Title

Type

Edit

Delete

Examination:

Language:

Search words:

Status:

Vouching: