The Euro and the European Union :: Politics Economics

The Euro and the European Union Many people would agree that Europe is a continent in which regions identify with each other even if they are not part of the same country. For that reason, as well as others, in 1957 the Treaty of Rome "declared a common European market as a European objective with the aim of increasing economic prosperity and contributing to 'an ever closer union among the peoples of Europe'" (www.euro.ecb.int). Later, in 1986 and then in 1992, the Single European Act and the Treaty of European Union tried to build on the previous treaty to create a system in Europe in which one currency could eventually be used all over the land under the heading of the Economic and Monetary Union. (www.euro.ecb.int) However, the question remains, why would the leaders of various European nations want to create one currency when the rights of national sovereignty have always been an issue for countries all over the world. Why, in 1998 did they create the European Central Bank, and why in "The third stage of EMU... on 1 January 1999, when the exchange rates of the participating currencies were irrevocably set" (www.euro.ecb.int) did eleven, and later twelve, countries link themselves economically in a way that has never been done before? The answer lies in history. "The need to link separate distinct political communities in order to achieve common objectives is an ancient one" (Woodard). One such example is the Greek independent city states that were linked by a league that dealt with economic issues. The same type of league linking towns in Italy can be found in medieval times. (Woodard) Later, "The United States made the key breakthrough. The states originally formed a loose relationship with weak central government (the Confederation). They replaced this system with a new constitution in 1789 creating the modern United States and defining federalism in its current sense" (Woodard). In doing so, it began a global discussion of the use of federalism to hold regions, and in particular colonies, together. In September of 1946, Winston Churchill made a speech at Zurich University in which he called for a "'United States of Europe'" (www.euro.ecb.int); clearly, this was not a new idea. Churchill thought that by uniting Europe, they would be able to put an end to Europe's decline economically in markets that the United States was quickly taking over.