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Why Have the Euro and the European Central Bank Been so Successful?

  • Date Submitted: 02/22/2011 03:16 PM
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Why have the Euro and The European Central Bank been so successful?

The initial success started more than fifty years ago, when background for European Monetary union was created.   Euro and the European Central bank is the result of many decades of hard and constructive work.   This is one of the highest levels of European integration and strong rout for further success of the Europe.

Single currency for Europe was proposed in 1970 by Pierre Verner, the Minister of Luxembourg, but just after a year devaluation of US dollar occurred. Furthermore there was the oil crisis and the Verner plan was put away for few decades. So instead of stable Monetary union most countries introduced a currency snake which set limits on exchange rate fluctuations against the number of European currencies and the US dollar. The proper European Monetary Agreement was created when European currency unit (ECU) was created in 1979. This was only a virtual currency and acted as a unit of account. I skip some important developments until 1992 when the Treaty on European Union was signed in Maastricht. It contained the framework and further steps for achieving Economic and Monetary Union and making it successful. In 1994 European Monetary Institute was established and did most of the path for new, common European Central Bank establishment. In 1998 European leaders met do decide which of the states had reached the sufficient rate of convergence and could participate in the single monetary union. Willem Duisenberg was elected as a first president of the ECB (European Central Bank) as well as other members of the board, which I will try to explain later on.   So the ECB was established 1st of June 1998. This was institution which formed the whole system of European central banks and the framework for the euro to exist and succeed.   31st of December 1998 the Euro was born and was fixed to all major European currencies forever. In 2002 1st January new bank notes and coins were introduced. Euro...

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