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Essay on Economic and Monetary Union
Monetary and Economic Union is an agreement between two or more states for a degree of common regulation of their respective currencies. Such an agreement may be no more than the legalization of joint circulation of different national currencies in frontier districts, or it may involve outright transfer of currency control by a small state to a more powerful neighbor. Between these two extremes, there are three major types of monetary unions: agreements that permit the circulation of some or all foreign coins at a fixed ratio to the domestic currency, agreements to maintain a common monetary unit, and arrangements for joint coinage of identical coins.In May 1998, 11 of the 15 countries that make up the European Union (EU) agreed to unite their monetary systems under a single currency, called the euro. (The number of participating countries later increased to 12). Electronic banking using the new monetary standard started in January 1999. Euro-denominated coins and banknotes entered circulation in January 2002, and the individual currencies of the countries participating in the single currency ceased to be legal tender.
European Monetary System (EMS), system designed to increase financial cooperation and monetary stability within the European Union (EU). The EMS was created in 1979 in response to the fluctuation of European exchange rates that occurred in the wake of dramatic increases in oil prices in 1974. The primary purposes of the EMS were to stabilize exchange rates in the EU and to aid the long-term process of European monetary integration.
In economics, a monetary union is a situation where several countries have agreed to share a single currency among them, for example, the East Caribbean Dollar. A monetary union differs from an Economic and monetary union, where it is not just currency but also economic policy that is pooled or co-ordinated (as in the European Union Euro zone, for instance)........
