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The European integration
The document summarizes the history and progress of European integration, from the initial European Coal and Steel Community in 1952 to the establishment of the European Union with the Maastricht Treaty in 1993. It describes the enlargement of the EU to include additional countries over time. It also outlines the three stages of establishing the Economic and Monetary Union, including adopting the euro as a common currency, and the criteria for countries to join the eurozone. Finally, it discusses benefits of the euro like price transparency and elimination of exchange rate risk, as well as increased financial integration within the euro area.
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The European integration
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- 2. PLAN • Progress ofEuropean integration • Enlargement of the European union • Preparation of economic and monetary union (EMU) • Three stages of economic and monetary union (EMU) • Convergence criterion • Economic and monetary union • Benefits of the EURO • Key characteristic of the euro area • Financial integration of the euro area
- 3. PROGRESS OF EUROPEANINTEGRATION 1952 ECSC European coal and Steel Community 1958 EEC and EURATOM European economic community EuropeanAtomic Energy Community 1967 EC European Communities 1993 EU European Union Maastricht treaty 2009 EU Treaty of Lisbon
- 4. ENLARGEMENT OFTHE EUROPEANUNION 1953 •Belgium •Netherlands •Luxembourg •France •Saarland •Italy •West Germany 1973 •United Kingdom •Gibraltar •Denmark •Greenland 1981 •Greece 1986 •Spain •Portugal 1995 •Austria •Sweden •Finland 2004 •Malta, Cyprus, Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Slovenia, Hungary, Akrotiri and Dhekelia 2007 •Bulgaria •Romania 20013 •Croatia
- 5. PREPARATION OF ECONOMICAND MONETARY UNION (EMU) •BARRE PLAN 1969 •WERNER REPORT 1970 •EMS 1979 • SINGLE European ACT 1986 • DELORS REPORT 1988 • INTRODUC TION in the EURO 1999-2002
- 6. THREE STAGES OFECONOMIC AND MONETARY UNION (EMU) 1 July 1990 - Abolition of all restrictions on the movement of capital 1 1 January 1994 – Establishment of the European Monetary Institute , the ECB ‘s predecessor 2 1 January 1999 – fixing of conversion rates, ECB responsible for monetary policy 3 1 January 2002 – Introduction of EURO banknotes and coins
- 7. CONVERGENCE CRITERION Economic andMonetary Union Interest rate convergence Exchange rate stability Price stability Pubic Finance discipline
- 8. ECONOMIC AND MONETARYUNION The Economic and Monetary Union (EMU) in the year 2014. • Members of the Eurozone • ERM-II-member (Lithuania) • ERM-II-member with opt-out (Denmark) • EU-member with opt-out (United Kingdom) • The rest of the EU-members
- 9. BENEFITS OFTHE EURO Securityof purchasing power PRICETRANCPARENCY REMOVALOF TRANSACTION COSTS Elimination OF EXCHANGE RATE RISKCountry b € 10,738 Country a € 13,247
- 10. KEY CHARACTERISTIC OFTHE EUROAREA Overall inflation rate in 2002: 2.3% Inflation directly linked to the introduction of euro banknotes and coins Inflation not linked to the introduction of euro banknotes and coins, i.e.: o Normal price increases o High increases in oil and petrol prices o High increases in fruit and vegetable prices Overall inflation rate in 2002 But: • Negative expectation • Some retails taking advantage • Price level in national currency “frozen in time” High perceived inflation
- 11. FINANCIAL INTEGRATION OFTHE EUROAREA Integration of financial markets, financial infrastructures and financial institutions o results in economies of scale, larger variety of financial products at lower cost o enhances transmission of monetary policy impulses o contributes to safeguarding of financial stability and smooth operation of payment systems EU today Euro area
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