o How the Euro was created, Economic and Monetary Policy since 2008
In this lesson, students will learn why eurozone was created, what good it bring to the Europe, how to join the eurozone, how euro helped survive the crisis and what was the aftermath of the crisis.
Lesson time foreseen
40 minutes = 1 lesson
• More choice, better prices
• Cross-border shopping is simply easier!
• A stable currency
• Cheaper and easier travel
• Economic stability encourages long-term planning
• Lower risks and reduced costs encourage cross-border trade and investments
1957 - Preparing the future of our common market
The foundation of the European Economic Community back m 1957 saw the birth of a common market and the beginning of European integration. It allowed for goods. people. services and capital to move ever more freely between Member States. without barriers
As exchange and movement across Europe became more common. It became clear that the single market was restricted by the many currencies in circulation. How could we break this additional barrier to Integration? In 1992. the Maastncht Treaty decided that Euro would have a strong and stable single currency for the 21st century.
On 1 January 2002, euro banknotes and coins entered our bank tills, cash registers, purses and pockets. Since then, the euro area has grown. bringing tangible benefits to an ever-increasing
number of citizens and businesses. The enlargement of the euro area is an ongoing and dynamic
There have always been criteria and rules in place to bring stability and harmony to the euro area economy. However, in response to some weak spots highlighted during the crisis, they have been strengthened to form the new EU economic governance framework which enforces the rules to help struggling euro area countries get back on track and avoid similar problems in the future.
• Symbol: €
• The symbol of the euro is €.
• The design of euro banknotes is common to all euro area Member States.
• Various security features have been incorporated into the euro banknotes. Have a good look at
• them to check for yourself!
• Euro coins have a uniform design on one side and a country-specific design on the other.
• low inflation and lower interest rates
• price transparency
• elimination of currency exchange costs
• more integrated financial markets with adequate regulation and supervision
• a better performing economy
• a framework for sounder public finances
• a stronger voice for the EU in the global economy
• greater ease of international trade
• a tangible symbol of European identity
The Eurogroup consists of the finance ministers from the euro area countries. They meet to coordinate their economic policies and to monitor their countries’ budgetary and financial policies. The Eurogroup also represents the euro’s interests in international forums. In January 2013, the Dutch finance minister, Jeroen Dijsselbloem, was elected President of the Eurogroup and re-elected in July 2015 to serve a second term.
The euro is the sole currency of 19 EU member states: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
• Price stability: the rate of inflation may not exceed by more than 1.5 percentage points the average rates of inflation of the three Member States with the lowest inflation.
• Interest rates: long-term interest rates may not vary by more than 2 percentage points in relation to the average interest rates of the three Member States with the lowest interest rates.
• Deficits: national budget deficits must be below 3 % of GDP.
• Public debt: this may not exceed 60 % of GDP.
• Exchange rate stability: exchange rates must have remained within the authorised margin of fluctuation for the previous 2 years.
You might be surprised to learn just how well-travelled the euro is' It is used in the Caribbean (Guadeloupe, Martinique and Saint-Barthelemy), in the Indian Ocean (Mayotte and Reunion) and the Atlantic Ocean (Azores. Canaries. Madeira and Saint Pierre and Miquelon) as well as in Ceuta and Melilla on the north coast of Africa and French Guiana in South America. It is also used in Monaco. San Marino. the Vatican City and Andorra as the national currency, and in Kosovo and Montenegro as the de facto currency.
The 2008 financial crisis considerably increased public debt in most EU countries. The euro shielded the most vulnerable economies from the risk of devaluation as they endured the crisis and faced attacks by speculators on the global financial markets.
History of the euro and eurozone: https://www.youtube.com/watch?v=PdLr3lTSyns