Recently my friends who are applying for the banking jobs are quite nervous about the European debt crisis. It’s affecting the other side of the world. I personally am not knowledgeable about the operation of the EU and therefore feel difficult analyzing the currency issues. Here I provide a brief history of the EU for future reference. (Here is their official website)
At 1950, Belgium, France, Germany, Italy, Luxembourg and the Netherlands founded the European Coal and Steel Community to sustain peace. In the 1960s, Europe saw rapid economic growth, and EU countries stopped charging custom duties when they traded with each other. Joint control over food production ensured that everybody had enough to eat – and soon there was even agricultural surplus. During the 1970s and 1980s, EU expanded quickly. In 1993 the Single Market is completed with the ‘four freedoms’ of: movement of goods, services, people and money. Schengen agreements allowed people to travel without borders. In 2002, the Euro was officially used.
Here is a map of all the countries in EU and their year of entry. The European Union tries to adopt single currency, i.e. a single fiscal policy, without a single political authority. This will surely cause problems. I hope to investigate further into the European debts problem in my later posts.