For all those interested in "The EURO and Financial Markets" - my new infoposter "ECONOMICS" is now available: - the poster gives an overview of the development of economic theory from its beginnings. - the poster shows the historical roots of economic ideas and their application to contemporary economic policy debates. View and order at http://www.cee-portal.at/PrestaShop Best regards Martin Kolmhofer

1. The EURO and Financial Markets International Economic Relations Metropolitan University Prague Martin Kolmhofer 2011/2012

7. Big Mac Index Informal way of measuring the purchasing power parity (PPP) between two currencies PPP - says that a currency’s price should reflect the amount of goods and services it can buy. Tendencially developed countries currencies are highly valued, developing nations currencies are less valued

12. What happens without exchange rate “buffer”? If competitiveness cannot be achieved via lower prices (either via exchange rate or lower wages or increased productivity) it will result in lower quantity demanded – Result: unemployment

14. History of the EURO / ECB

15. The Long Road to Maastricht and to the Euro At the Hague summit of 1969 , European leaders committed themselves to the policy objective of establishing economic and monetary union. The summit led to the creation of a committee, chaired by Luxembourg Prime Minister Pierre Werner, to produce a multi-stage plan for achieving EMU. Maastricht Treaty 1991: A firm commitment to launch the single currency by January 1999 at the latest (Monetary union started in 1999, just as scheduled -Britain, Denmark, Sweden and Greece did not participate in the Euro when it was launched in 1999)

17. The System The ECB is run by the Governing Council which is made up of an Executive Board of six members, appointed by the heads of states or governments of the countries which have joined the monetary union + the governors of the national central banks of EU members in the Eurozone. (Executive Board: Appointed for 8 years, not reappointed)

18. ECB Governing Council 2011