In recent weeks there has been increasing speculation that the movement towards a single currency in the European Monetary Union (EMU) will be delayed or even abandoned (Kamm and Steinmetz, 1997). The purpose of this analysis will be to first describe the economic steps which have already been initiated, both individually and collectively. By the member-states of the European Union to create a common currency. The discussion will then detail the economic and political events of the past few months which have cast an increasing cloud over the likelihood of a Euro-currency in the near future. The presentation will conclude with some speculations on the probabilities for a common currency in the longer term as well as summarize the inherent difficulties of economic management involved in such a process.
The European Union (EU), which includes within its framework the European Community (EC) is a supernational organization which in some cases exercises exclusive authority to adopt legislation and represent its membership in the international arena, and in other cases shares competence with the authorities of its member states. These states are: Austria, Finland, Sweden, Belgium, France, Denmark, Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain, the Netherlands, and the United Kingdom. Its legal capacity is most highly developed in economic areas such as trade, antitrust policy, agriculture, transport, nuclear energy, and in the environment. In areas within its exclusive competence, the EU is represented by the European Commission (Wolff, 1996).The Maastricht Treaty (named for the Dutch town in which the treaty was signed) is also known as the Treaty of European Union. It was negotiated in 1991, signed in 1992 and entered into force on November 1, 1993. The treaty introduced new areas for coordination among the member states and the EU institutions, such as the Common Foreign and Security Policy and Cooperation in J...