In the past twenty years, the Euro has enjoyed its fair share of success as a currency as well as challenges that threaten the future of the currency. Since the creation of the currency and being adopted by 19 European countries as the official currency the Euro has had challenges that risk its use and purpose in the near future. Members of the Eurozone lost important policy levers by accepting the Euro as the official currency. For example, if a company was hit by a recession, there was no currency to devalue to stabilize its exchange rate. Member countries do not have central banks to regulate interest rates to encourage spending and stimulate growth.
It is because of the euro that countries like Greece, span and now Italy face economic hardships. Countries like Germany and Italy who are among the economic powerhouses in Eurozone are threatening to leave the integration because of the risks that come with a common currency. The economic differences in Europe countries and lack of a common budget are among the problems that will persist in the future of the Euro.
Delegate your assignment to our experts and they will do the rest.
The Euro will continue to experience problems in the future with member countries wanting to have their own currency. The reason for is the differences in fiscal safeguards to protect the common monetary policy. The ‘incomplete monetary union’ in Eurozone will cause conflicts in the future 1 . Lack of structures on how to resolve conflicts that would arise from the European single currency project. With some countries standing to gain from conflicts while others lost the Euro is bound not to succeed. While there is a push for the Euro to become a global currency, that will not be possible with the current imbalance and conflict among the Eurozone members.
References
Mody , A. (2018). Why the euro failed. Retrieved from https://qz.com/1377098/why-the-euro-failed/ .
1 Mody , A. (2018). Why the euro failed. Retrieved from https://qz.com/1377098/why-the-euro-failed/ .
