Economic And Monetary Union Of Europe

Economic and Monetary Union of Europe


     The main reason for creating a European Market was the growing

international competitiveness. In the mid of the eighties the European countries

recognized that in the long run the national economies alone won't be able to

compete against countries like the US, Japan and the new industrial centers in

East Asia. The biggest advantage of the European integration is the unique

chance of causing significant economic growth in the member countries by

abolishing all kinds of barriers e.g. customs controls, trade restrictions,

liberation of the movement of capital, tax harmonization, and by the opening of

the financial market, a common trade policy, a common service market, common

legal protection of companies and so on.


     The two countries who support the European integration most (at least

their governments) are Germany and France. One reason therefore might be that

both countries have a dramatic increase in unemployment rate within the past few

years. In Baden-Württemberg for example, the area where I am from, the

unemployment rate has gone up from about 4% in 1992 to around 9% nowadays. Most

likely Mr. Chirac's and Mr. Kohl's only solution concerning the unemployment is

a fully integrated economy which for sure would create new jobs in Europe.


        The German population, however, is scared that a United Europe would

create new jobs only in low wage countries like e.g. Portugal. Many think that a

European market with no barriers would would even cause “job hollowing out” of

Germany. Moreover the German population likes the strength of the D-Mark and is

worried that a single European currency would be weaker. As a result of this

many Germans change their money into Swiss Francs. So far Switzerland has done

quite well by not taking place in all events available. One reason why they are

better off is that they didn't take place neither in World War I nor in World

war II and therefore didn't have to rebuild everything.


     Some people expect that in a Unified Europe the standard of living in

the richer countries will decrease while the people in poorer countries will

fare better. One professor of mine once said: “Somebody must pay for the

European Integration. Most likely this will be the richer countries like us. It

was the same with the German Unification”. This shows that even some very

educated people in Germany are skeptical concerning the new Europe. The light

poll at the last election of the European parliament seems to be showing that

the German population is not that much interested in Europe. The average

worker/person if living in Germany or 
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