The Euro

The euro decided to introduce the euro in 1991. It soon became the currency of 11 European countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Actual coins are released before January 1, 2002, but can be used to complete transactions and transactions. With this introduction, it becomes possible to supply single currency in most parts of Europe, the price and the transparency of the stock increase in countries using it, eliminating the risk of foreign exchange, which makes it possible for long- Investment will be promoted.

Let's see an example of Danish krone. It is pegged by the euro and the exchange rate of 1 euro is NOK 46,038. The Fiat currency peg is supported by the central bank. The Danish Central Bank can easily confirm that you can exchange euros at (at least) 46,038 kronor at any time. If the market price of the Krona rises against the euro, the profit per crona is less than 46,038 euros, the Danish Central Bank prints more krona and sells 1 / 7.46038 euro to the peg exchange rate to the Krona market You can lower the price

Regarding the euro, I feel uneasy about the European leaders being self-righteous and satisfied. It is based on speculation that the euro will be continually celebrated in euros even after Greece has left the euro. No one knows how the euro exit works or how it affects other member states. However, this definitely means that the euro is not a "fixed and irrevocable" currency alliance. This means that there is an undocumented rule linking the euro member countries with the willingness to repay a public loan.

It is actually very strange to make the euro blamed on the current deadlock, as the euro founder clearly warns the member states not to fall into this situation. The story of the abolition of 'no salvation provision' in Europe is an interesting story. It is not an inevitable crisis, but because of unnecessary embarrassment, confusion, and arrogance we can believe that we do not need to make decisions in the current situation. A few years ago when I was writing this article, I reviewed many of the papers written by economists about the future of the euro in the 1990s. Financial constraints of stability and growth agreements are often respected and members of the euro, which are economically difficult, will not be relieved by other countries.