European Union Essays - Eurozone, Economy Of The European Union

European Union Essays - Eurozone, Economy Of The European Union European Union In 1967, three European institutions merged. The three institutions were the European Coal and Steel Community (ECSC), the European Economic Community (EEC), and the European Atomic Energy Community (Euratom). When the three merged, they formed the European Community or EC. On November 1, 1993, the 12 members of the European Community ratified the Treaty on European Union, or Maastricht Treaty. The twelve members were- Belgium, Denmark, France, Germany, Great Britain, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. The countries of the Benelux Economic Union- Belgium, the Netherlands, and Luxembourg- continue to and in some ways as a single economic entity within the European Union. The EC became the policy-making body of the European Union. In 1994 Austria, Finland, and Sweden became members of the European Union. By 1997 more than a dozen countries had applied for European Union membership, but the European Union had only admitted the three listed above. The other countries that applied for membership include Turkey, Cyprus, Malta, Switzerland, Hungary, Poland, Romania, Slovakia, Latvia, Estonia, Lithuania, Bulgaria, and the Czech Republic. Of those countries, six are considered associate members of the European Union: Bulgaria, Czech Republic, Hungary, Poland, Romania, and Slovakia. Three other countries-Estonia, Latvia, and Lithuania-are being considered for associate membership. Other potential European Union applicants include members of the European Free Trade Association. The European Union was expected to decide which counties it would open negotiations for full membership with by the end of 1997. The purpose of the European Union was to increase economic integration and strengthen cooperation among its member states. European citizenship was granted to citizens of each member state, under the Treaty on European Union. Customs and immigration agreements were enhanced to allow European citizens more freedom to live, work, and study in any of the member states, and border controls were also eased. The European Union also set a goal of establishing a single European currency, the Euro, by 1997; this date was later changed to 1999. It is proposed that full circulation of the Euro is to be in effect by the year 2002. At that time the individual states notes will no longer be valid. The European Union?s attempts to establish a single European currency have had some controversy. An example is, some member countries, such as Great Britain, have worried that a shared European currency would threaten their national identity and their government?s authority. On the other hand, some of the other European Union member countries have been struggling to meet the economic requirements for participating in a common currency. To meet the requirements, which include a budget deficit of no more than three percent of their gross domestic product, by the deadline of late 1997. To meet the requirements some countries have imposed budget cuts and new taxes. Some of the measures taken by these countries have faced some resistance. The people who will mainly benefit from the common currency are the European citizens. The overall benefit that the euro will bring is a stable economic environment that will lead to low inflation and low interest rates. There are three main areas that the member states will gain savings from, they include, reduced losses created by currency exchanges, lower costs created by better competition in the euro zone, and a more favorable trading and investment environment for local businesses. The reduction of losses due to the elimination of currency exchanges within the euro zone will produce almost a whole percentage point of annual European Union GDP every year. The use of a common currency will allow easier price comparisons in the member states. By eliminating the currency exchange risk, economic and monetary union will bring more business and trading potential to commercial companies, especially small and medium-sized businesses. Large European companies will have a reduction in a l ot of their costs, mainly in the processes of foreign exchange transactions. Consumers will benefit greatly from the common currency. Some of the benefits include: reduced costs for traveling to other countries; easier and less expensive transfer of funds to other countries; increased competition between businesses, which will lead to lower prices; low interest rates; and more economic growth, which will lead to increased job security. The European