Search for notes by fellow students, in your own course and all over the country.
Browse our notes for titles which look like what you need, you can preview any of the notes via a sample of the contents. After you're happy these are the notes you're after simply pop them into your shopping cart.
Title: Economic advantages of single currency
Description: The notes discuss the efficiency of a single currency in a community of nations. This is in line with International Trade Law. 4th Year LLB
Description: The notes discuss the efficiency of a single currency in a community of nations. This is in line with International Trade Law. 4th Year LLB
Document Preview
Extracts from the notes are below, to see the PDF you'll receive please use the links above
The Economic Advantages of a
Single Currency
and its Current Systemic Flaws
Roland Freudenstein
Centre for European Studies
Cadenabbia 30 Nov 2012
„restating the obvious is the first
duty of intelligent men“
Advantages: Single Market related
• Exchange related transaction costs
disappear
• No more price distortion, more
transparent price comparisons
• Exchange rate uncertainty is eliminated
Advantages: global & political
• Lower risk of exposure to speculative
attacks
• Common currency becomes global
reserve currency (lower price volatility
for importers; possible reduction of
intrerest rates)
• Visible symbol of the Union
The Optimal Currency Area (OCA)
• * Early 1960s
• Countries can no longer change the
value of their currencies
In case of loss of competitiveness
OCA preconditions
• Member states have similar business cycles
(no asymmetric shocks)
• Member states have similar economic
structures
• Labour and capital mobility are high
• Price and wage flexibility
• Sufficient fiscal transfers
• Similar inflation levels
Eurozone ‐ Action is necessary:
• Ensuring economic convergence (economic
governance/government)
• Ensuring sustainable debt/GDP ratio (Stability &
Growth Pact)
• Some degree of common liability
(Eurobonds/Debt Agency/ECB as lender of last
resort)
• Improving skills and getting to full employment
(education, R&D, taxes)
Dilemmas and challenges
• Subsidiarity: Economic framework or
economic government?
• Common liability or common responsibility:
Which comes first?
• A two‐tier Union?
• National democracy and the rights of
national Pariaments
• Tackling the EU democratic deficit
Dilemmas and challenges
CES publication
www
...
eu
Title: Economic advantages of single currency
Description: The notes discuss the efficiency of a single currency in a community of nations. This is in line with International Trade Law. 4th Year LLB
Description: The notes discuss the efficiency of a single currency in a community of nations. This is in line with International Trade Law. 4th Year LLB