The document provides a history and overview of the Euro currency. It discusses how the Euro was created in 1999 by European Union members to promote economic stability and integration. It outlines the member states and challenges faced like debt issues in Greece, Ireland, Portugal and Spain. The document also discusses the Euro's performance over time, progress made through austerity measures, and varying opinions on its future.

1. The Euro: Past, Present, and Future

2. Outline Introduction History Performance Challenges Progress Future

3. Introduction 1st January 1999 the Euro Currency was born The Euro-system assumes responsibility of the region’s monetary system EU hoped to create economic stability and opportunities in the European market Give Europe a concrete identity in the international monetary scene

5. Portugal

6. Finland

7. Greece

8. Slovenia

9. Cyprus

10. Malta

11. SlovakiaBelgium Germany Ireland Spain France Italy, Luxembourg, The Netherlands

12. Pending members Sweden Bulgaria Poland Hungary The Czech Republic Denmark and Great Britain not interested at this point

13. A Single Currency Eliminates exchange risk Eliminates cost of exchange Increases price stability and transparency Stimulates economic growth

14. History 12 members of the to-be European Union met in the Maastricht, Netherlands and discussed the creation of the European Union. The Maastricht Treaty created the European Union as we know it today and led to the creation of the euro These states agreed to set up a single currency as part of a drive towards the European Economic and Monetary Union.

15. History European Coal and Steel Community (ECSC) on the 18th of April 1951 The treaties of rome were signed on the 25th of March 1957 European Atomic Energy Community (AEC) European Economic Community (EEC) Common Agricultural Policy (CAP) 1968 customs union 1968 a customs union

16. The "British problem Great Britain refused to be a part of the EEC UK Formed the European Free Trade Association (EFTA) 1961 the UK tried to join the EEC (after little success with EFTA) Blocked by the then French Prime Minister twice (1961 and 1967) UK Finally joined in 1973

17. The Maastricht Treaty Signed on the 7th of February in 1992 Formation of the European Union European Citizenship over national citizen

18. The euro was initially introduced only in electronic form. cash and coin came in January 2002 Currencies like the German Mark, French Franc, Italian Lira etc. were no longer in existence by July 2002 European Central Bank (ECB) began to form policies for the countries that were using the euro

19. 20 years of the EURO 1979-2002

20. Performance Improved economic growth across Europe’s financial markets All the countries under the euro system must have the same interest rates Governments cannot manipulate interest rates to stimulate economies Economies have not been performing the same way

21. Currency Performance

22. Euro Timeline 2001-2011

23. Economic Indicators Exports GDP Inflation

24. Exports Exports increased The number of products exported increased The number of exporters increased

25. Shift in the supply curve

26. GDP

27. GDP

28. GDP

29. Inflation

30. Inflation

31. Inflation

32. Current Problems The appreciation of the euro Debt Greece, Ireland, Portugal, and Spain

33. Debt Criterion A country’s deficit is not to exceed 3% of GDP A country’s debt is not to exceed 60% of GDP

34. Challenges Restructuring of debt Disparities in the economic performance of Member States Asymmetric Shocks

35. Asymmetric Shock

36. Progress Austerity measures Decrease in government spending Tax increases Retirement age increased

37. Government Regulation Tighter capital requirements Basel III requirements Securitization vehicles Credit rating agencies New derivatives regulations Financial watchdogs Tougher on tax evasion

38. EU Bailout $955 billion to assist sovereign debt crisis 59% from loans from euro zone governments 33% from the IMF 8% from an EU emergency fund

39. Future of the Euro The currency EUR/USD Futures June 2011 – 1.4523 Sept 2011 – 1.4482 Dec 2011 – 1.4420 March 2012 – 143.86

40. Future of the Euro Opinions vary Efforts of the ECB and EU will prevail Member States forced out Euro zone split into separate currency areas Euro extinction