Economic Union
Coordination of MS economic, and fiscal policies
Monetary Union
A single monetary policy for MS that have introduced the €
Ex. Monetary policy
The value, confidence, control of inflation, and interest rate of a currency
Ex. Fiscal policy
How governments raise/spend revenues, & the effect it has on deficits, taxes, and the economy
How many EMU Progression stages are there
3
Stage 1
1990
Increased Cooperation between central banks
Stage 2
1994
-Establishment of the European Monetary Instituties
-Stability & Growth pact
-Convergence Criteria
Stage 3
1999
- Intro to € & European Central Bank
- Single monetary Policy
Ex. Convergence Criteria
Standards a state would have to meet in order to qualify to adopt the €
How did the ECB become?
Originally European Monetary Institute changed on June, 1, 1998 TOMaastricht
ECB Main tasks
1.Conducting EU monetary policy
2.Maintaining Financial stability
3.Managing the eurozone foreign reserves
What does the ECB do?
ECB keeps the € Stable, Inflation low,and the financial system down
Ex. Eurozone
All MS that have adopted the € as their currency
Electro Currency - 1999
Cash Currency - 2002
Ex.Euro group
Ministers of finance or Eurozone countries
Ex. Euro System
The ECB & National Banks or the Eurozone countries
ECB President?
Christine Lagarda
ECB 3 Decision making bodies ?
- ECB Governing Council
- Executive Board
- General Council
Ex. ECB Governing Council
- Most important decision making body
- 6 executive board members + governs of national central banks
Ex. ECB Executive board
- Oversees daily ECB business
- Prepares Governing Council
- President, VP, 4 members
Ex. ECB General Council
- Advices & Coordinates
- Helps in the entry to Eurozone
- President, VP, 27 National central bank members
Ex. Eurozone Crisis
- Global Financal Crisis
- 2009 Sovereign debt Crisis
How and where did the Sovereign debt crisis begin
- Greece
- Flaws in €zone governance
- Domestic problems in PIGS
