Europe in the International Economic Order Research Paper

Europe in the International Economic Order - Research Paper Example The European Union was formed with the aim of strengthening the economic and political powers of the European countries and emerge as an international superpower. The emergence of the Euro is also a part of this project. Euro was introduced as a common currency for the participating European nations to remove the exchange rate risks within the internal market, to boost up trade across nations and most importantly to bring in monetary stability in Europe. (Fedee, n.d.) Another major purpose was to challenge the increasingly monopolistic power of the currency dollar as a single international currency and to rescue its members from the fluctuations of the dollar. The introduction of Euro has been the most important development in the international economy; it has become the major medium of trade especially in the euro area and other European countries. â€Å" Euro has played a major role in fostering harmony among diverse economies, which had conflicting monetary and fiscal policies, t ariffs and other restrictions on trade and investments† quotes Haruhiko Kuroda, head of Asian Development Bank at this years Brussels Economic forum (Vucheva, 2009). The Eurozone formed covering 11 countries in 1999, â€Å"Belgium, Germany, Spain, Italy, Ireland, Luxembourg, the Netherlands, Austria, Portugal and Finland† (Q&A: Euro basics, 2002). Greece was allowed to join only after 2001, later Slovenia Malta and Cyprus followed the suit, Slovakia became the 16th country to join the group. (Vucheva, 2009) Joining Eurozone it had the advantage of trading its inflation prone home currency to the stable Euro. It also gained an upper hand in the borrowing activities, which led to an increase in liquidity in the market which in turn improved the standard of living of the Greek citizens. Loans for individuals, governments as well as corporate houses were available at very low-interest rates, which are available only among the developed nations like Germany.