Economic & Monetary Union
Where can you find the EMU (Economic Monetary Union)
Maastricht Treaty
Which treaty led to the establishment of the European Central Bank?
The Treaty of Amsterdam, 1999
When year the Euro first introduced as a physical currency?
2002. How was it used prior?
How did the Eurobaromoter (an indicator for how citizens think about EU integration) change following the euro crisis?
Significant drop post-euro crisis. How was this exemplified?
What are the two goals of the European Central Bank?
1) Create price stability
2) Achieve full employment
What is the Economic & Monetary Union?
The Union is a group of policies meant to converge the financial economies of the member states. How is this accomplished??
Who is responsible for the single currency?
The European Central Bank is responsible for the single currency.
What event in 2007 marked the beginning of the global financial crisis, which subsequently led to the Euro Crisis?
The suspension of trading on three investment funds by BNP Paribas due to difficulties in the US subprime mortgage market.
Which Council of the EU has become the so-called “new centre of political gravity” when it comes to euro area economic governance, especially following the Euro Crisis?
European Council
What are the 3 main roles of the ECB?
1) Defines and Implements Monetary policy
2) Holds official reserves of member states
3) Conducts Foreign exchange operations
What are the 2 conditions to establish a Monetary Union?
1) Benefits higher than costs
2) Optimal Currency Area (created by who???)
What is the primary goal of the European Central Bank?
To achieve price stability (set as close to, but not more than, 2 percent inflation)
Which countries were particularly vulnerable during the Euro Crisis? At least 3 countries
Greece, Ireland, Portugal, Spain, and Cyprus. Why? What caused this vulnerability?
What is the European Commission economic recovery package to support the EU member states in recovering from Covid-19?
the Next Generation EU Package
What are the 3 main roles of the Council in monetary policy?
1) ECOFIN
2) Final say on intervention in foreign exchange markets
3) Concludes monetary arrangements in third countries
What 3 elements compose the ECB governing council?
1) Executive board (6 members)
2) National bank governors
3) Simple majority
What term is used to denote the European Central Bank plus the national central banks of EU member states that have adopted the euro?
Eurosystem
What mechanism did the European Central Bank (ECB) introduce in response to the crisis to help stabilize the euro area?
The Outright Monetary Transactions (OMT) program. What did this program involve?
Does the European Commission economic recovery package mark a significant change or alternative to traditional ESM stabilization efforts?
Substantial change. How is this accomplished??
What is the role of the ”EuroGroup” in monetary policy?
Meets to discuss policies of common interest for member states prior to the EcoFin meeting
What are the 4 Convergence Criteria each member of the EMU must meet in order to join?
1) Price stability: limit 1.5% above top 3 economic performers
2) Interest: limit 2% above top 3 economic performers
3) Budget: deficit limit 3% of GDP & Public debt limit 60% GDP
4) Current stability: membership to the EexRm for at least 2 years
How did the European Central Bank (ECB) respond to the global financial crisis and the sovereign debt crisis?
The ECB took measures to stabilize the economy, including setting key interest rates and providing liquidity to the banking sector. It also played a crucial role in the creation of the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM).
How did the concept of "new intergovernmentalism" manifest in the EU's response to the Euro Crisis?
New intergovernmentalism was popularized heavily post crisis. Why?
In which direction is the EU going in regards to policy-making following the euro crisis?
Intergovernmental. Thoughts?
What are the 2 roles of the European Parliament in monetary policy?
1) formulates legislation alongside the Council
2) analyzes the economic decisions to ensure everything is democratically compatible