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• Umbrella term for the group of policies
aimed at converging the economies of all
member states.
• Instrument to further ...
The Treaty of Rome (1957)
• On 25th March 1957, was signed the Treaty in
Rome that gave birth to the European Economic
Com...
The Hague Summit (1969)
The Werner group submitted its final report in October
1970, setting out a three-stage process to ...
Enlargement of EMU
• First enlargement in 1973: Denmark, Ireland, United
Kingdom.
• 1980: Greece, Spain, Portugal
• 1993-2...
Phase 3: From the start of EMS to
Maastricht, 1979 to 1991
• The European Monetary System (EMS)
• European Exchange Rate M...
Phase 4: From Maastricht to the euro and
the euro area, 1991 to 2002
• European Monetary Institute (EMI)
• On 1 January
19...
“Convergence Criteria“ include five
requirements:
1. currencies has to stay within the bands set
by the ERM for at least t...
Institutional makeup of European
Monetary Union
EMU
Eurosystem European system of
central banks
ECB + 18 NCBs of Euro
area...
Institutional makeup of EMU
ECB Monetary policy
• Objectives
- The main task is to deliver price stability
• Instruments
- Three types of instruments:...
European Monetary Union
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European Monetary Union

  1. 1. • Umbrella term for the group of policies aimed at converging the economies of all member states. • Instrument to further the objectives of the EU and improve the lives of citizens in the Member States. EMU members = Eurozone + Non-Eurozone members What is ?
  2. 2. The Treaty of Rome (1957) • On 25th March 1957, was signed the Treaty in Rome that gave birth to the European Economic Community (EEC). Common Market/European Community • The six founding member’s states: Belgium France Italy Luxembourg Netherlands West Germany Phase 1: From the Treaty of Rome to the Werner Report, 1957 to 1970
  3. 3. The Hague Summit (1969) The Werner group submitted its final report in October 1970, setting out a three-stage process to achieve EMU within a ten-year period. The final objective would be: 1) Irreversible convertibility of currencies; 2) Free movement of capital; 3) Permanent locking of exchange rates, or possibly a single currency. Phase 2: From the Werner Report to the European Monetary System, 1970 to 1979
  4. 4. Enlargement of EMU • First enlargement in 1973: Denmark, Ireland, United Kingdom. • 1980: Greece, Spain, Portugal • 1993-2013 additional sixteen countries joined.
  5. 5. Phase 3: From the start of EMS to Maastricht, 1979 to 1991 • The European Monetary System (EMS) • European Exchange Rate Mechanism (ERM) and European Currency Unit (ECU) • Maastricht Treaty on European Union (1991): Stage 1: the free movement of capital between Member States; Stage 2: convergence of Member States economic policies and strengthening of cooperation between Member States national central banks; Stage 3: introduction of the euro as the single currency of the Member States and the implementation of a common monetary policy
  6. 6. Phase 4: From Maastricht to the euro and the euro area, 1991 to 2002 • European Monetary Institute (EMI) • On 1 January 1999 the euro was adopted in non-physical form
  7. 7. “Convergence Criteria“ include five requirements: 1. currencies has to stay within the bands set by the ERM for at least two years; 2. long-term interest rates could not be more than two percentage points higher than those of the three, best-performing member states; 3. inflation had to be below a reference value (within 3 years prices may not be higher than 1,5% of best performer); 4. government debt had to be below 60% of GDP (or moving towards this objective); 5. budget deficits should be below 3%.
  8. 8. Institutional makeup of European Monetary Union EMU Eurosystem European system of central banks ECB + 18 NCBs of Euro area member states ECB + 28 NCBs of EU member states
  9. 9. Institutional makeup of EMU
  10. 10. ECB Monetary policy • Objectives - The main task is to deliver price stability • Instruments - Three types of instruments: Standing Facilities, Open market, Reserve requirements • Strategy - Two elements: Quantitative or Price stability objectives and two pillar assessment of risk to price stability
  • SooJungie

    Mar. 7, 2018

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