European Central Bank (ECB).
A central bank is an entity that can provide benefits to a market.
It is transparent and can show transactions
It is consistent. It's actions can be predicted because it is one large unit rather than a number of smaller ones like the national banks of each member nation.
It can work with the local national banks.
The central bank is working during the current crisis to provide credit to households and business and to provide a better governance in the future.
The national banks play an important role in the European Central bank. They hold foreign reserves, and mint coins. However some if their large transactions are supervised by the central bank.
The Euro was developed as a virtual currency. The money system was to be used by an independent bank for transactions. There was no currency in circulation.
To phase in the Euro, both the nation's currency and the national money was initially allowed, but the national currency was withdrawn after six months.
One currency made transactions easier.
Travelers could use the currencies as tourists.
The large money pool would insulate individual members from large currency fluctuations. An event such as the large fluctuation in the petroleum prices would be dampered.
The money system would encourage members to have budget restraints, and control inflation.
Consumers have more choices and stable prices
Business have a more secure market and more opportunities.
The common currency provide a common sense of European identity.
Partnerships are voluntary. Not all member nations joined the system. The United Kingdom did not join.
The countries who choose to introduce the Euro adopt a communication strategy. Items that are co-financed are:
Each member nation who accepted the Euro could mint their own coins. The picture of the nations choosing is on the back of the coin, but the front of the coin has a common feature. Coins are minted with edges so that the visually impaired can use them by feel. Tourist may still be able to collect coins from the country they visit, but the coins are accepted in other countries.
Two metals are used on the 1 and 2 Euro coins. The two types were used to discourage counterfeiting. During World War II attempts to reduce the stability of the money of the enemy were made by introducing counterfeit money. This problem was recognized during the design phase of the money and attempts were made to minimize this problem.
The Euro as Currency,
The appearance of the Euro is not particularly impressive. The coins are in hundreds of a Euro bill and are multicolored. The appearance of the currency is bland. Whether a Latin American continent would like the currency is an interesting question, since Spain is part of the Euro currency system. It is an alternative to the American dollar for any anti-American sentiment in a nation, where the people have their own currency, which is not as stable as the American currency.
The question of the dollar's popularity in China is a subject of debate in the two major parties in the U.S., because of the trade deficit with China. The Chinese do not seem to be concerned about the debt of the European Union or the U.S.
The percentage of the international debt owed by the United States is 44% while the Euro is 33%.Thus the Euro is becoming an international currency acceptable in paying debts second only to the U.S.
China is becoming a serious trading competitor with the U.S.and the European Union trading block.
With a large amount of total engineers in a very large population, China is considered a serious player in new product development.
China also owns a large amount of the U.S,'s international debt, which was developed by continuing trade deficits over the last decade.
The Euro and Jobs.
The Euro is to create stability in the political and economic sectors as well as the labor and capital markets. It will not create jobs by itself.
The desired goal is to create a model to:
While a 2% growth rate is a start, more jobs must be created for workers comming into the market.
Greece and Spain
Some governments increase their debt faster than the Gross Domestic product can increase. This excessive spending will lead to inflation. The big prosperous countries will be called to bail out the less prosperous members. The International Monetary fund will then loan money to the member. Iceland is another country with excessive debt.
Germany is a net exporter of goods. It will loan money to members so that it can continue to trade with the members. Germany is the largest member in the organization. It is larger than Turkey.