History of the Euro

It has been a long time in the making, but scheduled plans have marked January 1, 2002 as the date that the new Euro currency banknotes and coins will be introduced in Europe. July 1, 2002 is the designated day that the changeover to a monetary union will be complete. The discussion as to the risks and benefits of this monetary union has been all the talk around the world. This union will have vast and far-reaching effects that will touch not only the countries in the union, but the entire world. There will be a dramatic and radical economic change in Europe. All national currencies will disappear and there will be only one money, the European Currency Unit or ECU.
Europe’s economy was in shambles after the end of World War II. They had invested a lot of money and resources to financing the war. In 1948, The United States Secretary of State George C. Marshall, suggested that the United States should assist Europe in their rebuilding, restructuring, and reconstruction. Offering U.S. capital, resources, and cooperation to the countries of Europe would accomplish this. This was known as the Marshall Plan. This plan was very successful right out of the gates. In just two years Europe was ahead in industrial production (up one hundred and thirty-eight percent) from its last year of peace before the war (Ball pg.138). The United States continued to work with and assist Europe and in 1957, the Treaty of Rome was signed. This created the European Community (EC), or as it is otherwise known as The European Economic Community (EEC). The premise behind this union was that if the countries of Europe were liked and dependent on each other financially, there would be less of a chance of them going to war again with each other. The European Community began with just six members. They were Belgium, Germany, France, Italy, Luxembourg, and the Netherlands. Following afterwards were the countries of Denmark, Ireland, United Kingdom, Greece, Portugal, and Spain. In 1995, Austria, Finland, and Sweden became members. All together, to this day, there are fifteen members in the EC. The purpose of the European Union was to improve cooperation between countries and remove, or at least reduce, trade and labor market barriers. In a sense, they want to create an entity very similiar to the U.S. in the fact that Americans enjoy relatively free movement of people, money, and goods. The headquarters of EU were established in Brussels. Here the EC Commission is responsible for many things such as labor, transportation, trade…etc. This is very similar to the United States Cabinet (Ball pg.139). A council of ministers was set up to be the policy-setting body for the EU. The Prime ministers of each country meet to establish policy, which will be enforced by the commissioners. The European Parliament was established as a governing body for the European Union. Voters in each member country elect its members. It operates as a system of checks and balances for the European Commission. It has the power to throw out all the commissioners or veto the entire EU budget. It was limited however, because in the previous powers it was all or nothing. They could not veto parts of the budget or eliminate certain commissioners. In 1987 the Single European Act gave the European Parliament some power to amend the legislation drafted by the European Commission. The EU Court of Justices was established to regulate and decide any cases that arise under the Treaty of Rome. Its power is growing because of the high volume of cases it handles and the authority it has over the courts of the member countries. European Union has definitely become a force in world international trade. It is the largest import and export market in the world. It is second in the world to the U.S. in GDP. It also accounts for twenty percent of world trade (Ball pg.139). The people of Europe feel that monetary union is the true key to becoming a powerful, strong, economic union. Europeans long for an environment similar to the United States where there are little or no barriers to trade or movement of labor. Many people feel that monetary union is the only way to achieve