Euro Currency Market
To understand the euro currency market, we have to go back to how it began.
For the euro currency, it originated from the European monetary system back in 1979.
The European monetary system played a massive role in the creation of the European currency unit.
On 1 January 1999, the Euro currency was introduced. Euro currency history started after the Maastricht treaty was signed.
Participating countries in the Maastricht treaty fixed their currencies to become the euro.
Because of this event, local currencies were not permitted to fluctuate against each other and the euro.
In the early days of the euro, it was merely launched as an electronic currency. It until 1 January 2002 that the euro as a cash currency became legal.
Euro Currency
In the Euro currency market, the currency of a country can be held in banks out of that country. Banks can also lend this currency and at the same time, borrowed.
That’s not all…
One fantastic thing about the euro currency market is that it can be utilized by multi-functional corporations, hedge funds, banks, and mutual funds.
They use it to circumvent regularly requirements, like interest rate caps and tax laws, which in most cases, present in domestic banking. These happen mostly in the United States.
Maastricht treaty1991
The Maastricht treaty was formally called the treaty on European Union.
From 9 to 10 December 1991, Maastricht city hosted members of the European council. It was here that the treaty was drafted.
Members of the European Union on 7 February 1992 signed the treaty.
Also, because it was signed in Maastricht Netherlands, they decided to name the treaty after the city. The treaty aimed to integrate the European Union.
This treaty played a considerable role in the formation of the European Union, and it was also used to create its pillar structure.
This pillar stayed in place until the Lisbon treaty was signed and came into effect from 2009.
Because this treaty expanded the EU/EEC competences, the European Union’s single currency, which is known as the euro, was created.
Euro Background
After years of strategizing and planning, the country in the European Union decided to start using the euro as their primary currency instead of their country’s currency. These happened on 1 January, 20002.
These were the first step in more significant consolidation of European economics and politics, that will help in developing the European Union (EU).
What’s more…
It is vital to remember that the first countries that started using the euro were EU members, but some other EU members did not use it.
Also, some non-EU members used the euro as their country’s official currency. Since after the introduction of the euro, many countries have accepted it.
Importance of Euro Currency Market
The euro currency market is essential in many ways, and one of them is it’s used to eliminate exchange rate fluctuations.
That’s not all…
The euro currency market has helped to increase trade and employment across borders.
Businesses now find it easier to expand their markets. It also helped in the improvement of financial stability.
What’s more…
It has helped to reform the structure of most European countries.
Purpose of Eurozone
The eurozone is simply an economic and geographic region that has all the countries of the European Union that have incorporated the euro as their primary currency.
Conclusion
The greater goal of the euro currency market is to have greater coordination and cooperation among themselves.
The social policies, policing, and environment were some of the vital things that countries in the European Union aimed at increasing.
