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The Euro and the European Union

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The adoption of the single currency, the Euro, was a bold move in a number of ways. It put paid to earlier fears of countries bailing out to preserve their beloved currency, but it also saw off a potential headache of having to deal with scheming robbers and Mafiosi  waiting to pounce of the large amounts of cash that was transported within the Euro zone in preparation to the E-day- when the currency was launched. The adoption is considered by some as the most important act of European institution building since the idea of closer integration among European countries resulted into the signing of the Treaty of Rome in 1957 (Dyson, 2000).

After the launch of the Euro in 1999, attention was now turned to the hitherto neglected question as to whether the treaty in place provided ample legal background for the European Union integration. One of the earlier obstacles faced were that the European Union was just a political project designed as an economic one (Crouch, 2000). The same problem confronted the new currency, the Euro. Was it designed just to serve as a counterweight to the US dollar? The fact is that the collapse of the Bretton Woods system brought profound exchange rate problems among many Euro zone currencies, which could have hindered the process of economic specialization and the tearing down of tariff walls across borders in Europe (Crouch, 2000). The European Monetary Policy was established to deal with this problem, but faced difficulties in the wake of financial deregulation among many European economies.  Adopting a single currency presented an opportunity to bring back stability among European currencies.

One might argue that the adoption of the Euro is a backdoor attempt to create one coherent aspect in the European Union.  The European Union is reputed to be completely bereft of any sort of identity. It is unlikely that a region as diverse as the European Union will find a 'European' identity to replace the national identities of more than 25 member states. In fact, such an attempt to create a European culture is more likely to be met with resistance, driven by the desire to preserve national based difference. But of course such an argument would be flawed as a currency can hardly be considered to be such spellbinding cultural tool, and many people are known to use different currency without really being overly concerned on its origin.

Not all member countries use the Euro. The United Kingdom and Belgium were given special derogation that allows them to stay out of the Euro unless and until their respective governments decide otherwise. Sweden did not, and may have to introduce the Euro in the future.

Pro-Europeans suffered a setback in 2005 when attempt to bring the European Union member states closer together came cropper when the French and later Netherlands voters voted non in a referendum to adopt a comprehensive European Union constitution. But the European Union has been a magnet to many countries, with several still waiting at the reception to be invited in. 



 1. Crouch, C (2000). After the Euro. Oxford University Press, Oxford.

 2. Dyson, K (2000). The Politics of the Euro Zone. Oxford University Press, Oxford.

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