Transcript THE EURO - Haynes Academy

GROWTH OF THE EU
GROWTH OF THE EU
Admission
of Romania
and Bulgaria
2007
Croatia and
Macedonia
2013
Major
debates
about
Turkey
What Does it Take to qualify for
Membership in the EU:
1. The candidate country has achieved stability of institutions
guaranteeing democracy, the rule of law, human rights
and respect for and protection of minorities.
2. The candidate country has the existence of a functioning market
economy, as well as the capacity to cope with competitive
pressure and market forces within the Union.
3. The candidate country has the ability to take on the obligations
of membership, including adherence to the aims of
political, economic and monetary union.
THE EURO
• The euro – Europe's new single
currency - represents the
consolidation and culmination
of European economic
integration.
• Its introduction on January 1,
1999, marked the final phase
of Economic and Monetary
Union (EMU), a three-stage
process that was launched in
1990 as EU member states
prepared for the 1992 single
market.
The EURO
Early 1990’s
• 1990: Aimed at boosting
cross-border business
activity, the first stage of
EMU lifted restrictions on
movements of capital
across internal EU borders.
• 1994: The European
Monetary Institute was
established in Frankfurt to
pave the way for the
European Central Bank.
1999: the Euro was introduced as the single
currency for eleven EU member states: Austria,
Belgium, Finland, France, Germany, Ireland,
Italy, Luxembourg, the Netherlands, Portugal,
and Spain.
1999-2002: The Euro and the previous national
currencies were concurrently used in
participating states.
The EURO
1999-Present
2002: The participating
countries had their
previous national
currencies withdrawn
permanently as legal
tender.
• EU member states not
yet using the Euro as
currency: Denmark,
Greece, Sweden,
United Kingdom
The Eurozone
•
•
•
•
•
•
Coins and banknotes 1st used Jan
1, 2002
Cyprus joined in 2008
Slovakia to join in 2009
Estonia joined in 2010
Sweden is technically obliged to
join but the EU has made public
that they will not enforce this
with regard to Sweden
Britain and Denmark have a
“derogation” releasing them
from having to join
What about Switzerland?
• Swiss are traditionally suspicious of other
countries
• Swiss tradition of neutrality (WWI & WWII)
– self-imposed
– permanent
– armed
• In some ways Switzerland is like the US
– Nationalistic government not interested in
ceding sovereignty
– Economic policies are currently designed to
protect local industries (esp. agriculture)
from foreign competition
Initial cost of joining EU (progressive financial
redistribution policy would cost the Swiss)
Switzerland has embarked on a policy of
building bilateral agreements with the EU
rather than joining outright
Costs of staying out
• Export problems
–Access to EU markets is not guaranteed
• Inflation problems
–Europeans nervous about the Euro due
to expansion of the EU invest in Swiss
Francs, inflating the value of the
currency and inhibiting Swiss exports
Capital flight
High construction costs, expensive labor,
and skill shortages already make
investment in Switzerland unattractive
Several multinational corporations, such as
Roche, Sulzer and Alusuisse, have frozen
planned investment projects in Switzerland
Large Swiss companies, including Nestle,
are shifting activities out of Switzerland in
fear of discrimination by other nations
Already four out of five employees of the
top 15 Swiss companies work in other
countries
Scientific information lag
EU scientific exchange programs accept
Swiss citizens only if they fail to fill such
exchanges with persons from EU countries
Accumulated bilateral agreements and
cooperation may create de-facto
incorporation in the EU for Switzerland