Will The Euro Survive?

The European Coal and Steel Community was a small economic organization founded in the 1950s by six European countries. Its purpose was to enforce these states in their fight against the Cold War. Their example motivated other countries on the old continent and they announced their will to join the community. This is how the supranational congregation got larger and slowly turned into a new organization, including 27 European member states governed by common laws in fields such as economy, policy, security etc. The name of this new alliance is the European Union. Its rulers considered that a monetary union would increase the economic power of their organization. Therefore they implemented the common currency, the euro.

Nowadays the eurozone includes 17 members. The entry requirements are rather harsh. Still there are three EU members which preferred to remain out of the monetary union. They are the United Kingdom, Denmark and Sweden. All three of them have opt outs. Other seven countries out of the ten outside the euro area will have to adhere to the monetary union as soon as they meet the entry requirements. By interpreting this piece of information, one might say that the euro is supposed to have a long life rather than approaching its end. Moreover, the skeptics have been disappointed at the tenth anniversary of the common currency since they did not predict the euro would live that long. So how are things in reality? Is the euro going to live happily ever after or will it soon vanish?

According to the Maastricht treaty, each one of the 17 members of the monetary union is free to leave it whenever it pleases. In reality, things seem to be a little more different. Specialists say it would be extremely problematic for someone to leave the euro because of the economic costs. This theory restrains the list of states which actually can say good bye to the common currency to only one: Germany. This country has the most stable economy in the EU, but, according to some economists, it is unlikely that Germany should leave the monetary union given its history on the continent.

Although the monetary union seems strong enough, the common currency is at the mercy of inflation. It has no backing in gold or other precious metals and therefore it is vulnerable to economic changes. Unfortunately, the evolution of the EU economy lately has not had a positive impact on the euro. The economic crisis determined Iceland and Greece to ask EU for bailout, while the situations of Spain, Ireland and Portugal also got worse. The unemployment remains an important issue in many member states and the aging population still gives headaches to some national governments. As icing on the cake, the E coli bacteria caused considerable prejudices to the EU agriculture. The common currency cannot remain immune to all these shifts.

The economic instability is mirrored by the EU’s common currency. The devaluation will therefore affect euro reserves as well. This is why many people turn to safer assets such as gold bars. The precious metal is not influenced by the shifts of economy, which makes it safe to invest in. More advice in this respect can be obtained from professional counselors.

In times of economic instability it is wise to take advice from professionals regarding how to buy gold bars.

Related posts:

1. Euro Pound Sterling -? W Channel about the difference about pensions and how they diff ently trade?
2. Money Exchange in Europe
3. Saudi faces struggle to push Gulf monetary union ahead
4. Polish Z?oty and Euro Coins
5. (Dpa-AFX UK Focus) 05/25/2010 16:25 Serbian dinar hits another new record high vs EUR