THE EURO AND CURRENT FINANCIAL CRISIS
Keywords:the euro, current financial crisis, the European Monetary Union, Greece, budget deficit
This article discusses the issues related to the European single currency in the context of the current global financial crisis. The paper gives an overview on the process and strategy for transition to the European Monetary Union (EMU) and discusses expected benefits and costs of the formation of the EMU. Since its launch in 1999 the euro has contributed to macroeconomic stability within the euro zone and produces clear benefits for companies, financial institutions and ordinary citizens. It is evident that the performance of the euro has been a success for the first ten years, but it is now faced with challenges owing to the current financial crisis. The present crisis shows that the weaknesses in the control and crisis management competence of the euro zone are affecting fiscal and financial stability in the EMU. The crisis in Greece, which mismanaged its economy and misled other the euro members about its true budget figures, has had an impact on the euro zone as a whole. Although the euro provides stability to the EMU members, there are doubts about the ability of the euro zone to respond to current financial problems.
Baimbridge M., Burkitt B. and Whyman P. (2000). The Impact of The Euro, London: MaCmilan Press Ltd.
Balzli, B. (2010). How Goldman Sachs Helped Greece to Mask Its True Debt. [www] Spiegel Online. February 8. Available from: http://www.spiegel.de/international/europe/0,1518,druck-676634,00.htlm. [Accessed 22/03/2010].
Ferry, J. (2009). The Euro at Ten: The Next Global Currency? Washington, DC: Peterson Institute for International Economics Brussels.
Garnham, P. (2010). Euro project tested by Greek crisis. Financial Times. London (UK). February 13, p. 21.
Huhne, C. (2001). Both sides of the coin: the arguments For and Against the Euro. London: Profile Books Ltd.
Issing, O., Gaspar, V.,Angeloni, I. and Tristani, O. (2001) Monetary Policy in the Euro Area, Cambridge: Cambridge University Press.
Lyons, N. (2010). How Ireland may collapse the Euro. Daily Mail. London (UK). February 15. p. 8.
Marsh, D. (2009). The Euro: The Politics of the New Global Currency. London: Yale University Press.
Martinuzzi, E., and Finch, G. (2010). Greece’s Goldman Sachs Swaps Spawn EU Dispute on Disclosure. Business Week. February 15.
Minford P, (2002). Should Britain Join the Euro? London: The Institute of Economic Affairs.
Patterson, B. (2006). The Euro: Success or Failure? European Movement. Briefing 6. February 2006.
R.A. (2010). The Euro stops where? [www] The Economist. February 8. Availbale from: http://www.economist.com/blogs/freexchange/2010/02/european_monetary_unionn.htlm [Accessed 04/03/2010].
Resnick, B.G. and Eun, C.S. (2001). International Financial Management. 2nd ed. New York: Irwin McGraw-Hill.
Sear, S. (1999), What every Bussiness Needs to Know about the Euro: Gower Publishing Limited, England
Thomas, L. (2010). Debt Worries Shift to Portugal, Spurred by Rising Bond Rates. [www] New York Times. April 15. Available from: http;//www.nytimes.com/2010/04/16/business/global/16business/global/16escudo.htlm
Wray, R. (2010). EU ministers agree Greek bailout terms. [www]Guardian. 11 April. Available from : http://www.guardian.co.uk/world/2010/apr/11/eu-greece-bailoutterms.htlm
Zestos, K.G. (2006), European Monetary Integration: The Euro. USA: Thompson South-Western.