RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL CURRENCY

Attempts to deal with faults in the international monetary system were undertaken in Europe commencing in the 1960s.  It was during this time that West Europeans began to consider a single currency for the continent.  By 1978, this had progressed to the formation of the European Economic Community; and the establishment of a European Monetary System.  The system promoted and maintained an arrangement of somewhat fixed exchange rates within the region, via an Exchange Rate Mechanism governing Western European currencies.  An official standard for European currency came into being, which led to the beginnings of currency stability across the continent.  One of the primary purposes or motivations behind this was protection of the continent from the effects of the wild swings that were befalling the American dollar during that period.
By the late '80s, pursuant to a plan propounded by French Finance Minister Jacques Delors, further steps were taken toward the establishment of a European monetary union and a common European currency.  And by 1991, the European community further cemented their common commitment to a unified monetary system by approval of the Maastricht Treaty.  This final step led the way to the birth of the Euro as the official currency of Euroland.

Among the benefits of such a unified system are an end to foreign exchange transactions--for no purpose other than profit; as well as monetary stability, which produces price stability, and is hence a defense against inflation.    The success and consequent expansion of this phenomenon within Europe is evidence that such a procedure could and should be replicated on a worldwide basis.

Today, unfortunately, some economic troubles have erupted in the Mediterranean nation-states, which seem to have resulted from varying degrees of excess and other profligacies regarding certain of their respective monetary and financial policies.  I attribute this to the fact that--while united under the aegis of a single currency, they remain separate and independent as regards their respective governments, and said governments' respective handling of national monetary policies.  Had the European Union adopted as well a form of unity regarding planning, determination, and direction of economic policy, concerning all of its membership, the application and utilization of this wise and practical currency system would have reaped benefit and improvement within all component nation-states--including those on the Mediterranean--instead of the disorder, protest, and desparate measures which have recently transpired.

                                                                * * * * *

PLEASE LEAVE A COMMENT--HERE--OR VIA E-MAIL AT oneworld@tampabay.rr.com