The Euro : conditions and realities

Abstract

"The Euro: Conditions & Realities" is a study that is focussed on the conditions or convergence criteria set for joining the euro zone.The peak point of reaching a European Union and more specifically an Economic Monetary Union lies in the attainment of a single currency area. In order to take part in the euro, the European Member States have to abide by the conditions decided upon in the Treaties. the conditions lay the foundations for a stable economic area where the different states' economic indicators converge. Not one of the convergence criteria can be ignored for each one is justified by the role it plays in rendering the euro zone stable and long lasting. Each country's participation will have to be examined in the light of the conditions and the decision as to whether a member state is fit to join the euro zone will be made accordingly. If the convergence criteria are to be applied strictly, it would appear that only six countries should take part in the euro namely, Finland, France, germany, Ireland, Luxembourg, and Portugal. this conclusion is based on statistics emanating from the Commission. On March25, 1998, the Commission sent the Council a recommendation for it to abrogate its previous decision concerning the existence of excessive deficit in some on the Member States. On that same day, the European Commission published the Council's Recommendation in which 11 Member States were found fit to take part in the euro zone. These were Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxemberg, the Netherlands, Portugal, and Spain. The issue of the future of the euro remains a very debatable one with twodiametrically opposed views presenting equally strong and persuasive arguments. However, there are good reasons to think that very strict restrictions should be applied on the Member States that have not fully conformed to all the conditions so that confidence in the new currency may be justified.