The Euro, the Snake and the Drachma Lawrence Goodman May 14, 2012

Total Page:16

File Type:pdf, Size:1020Kb

The Euro, the Snake and the Drachma Lawrence Goodman May 14, 2012 CENTER FOR FINANCIAL STABILITY Dialog Insight S o l u t i o n s The Euro, the Snake and the Drachma Lawrence Goodman May 14, 2012 As time progresses and the wall of official support for Europe seems to be hitting a ceiling, other solutions must be found. It is hardly a wonder that calls for a shift in exchange rate policy are now heard more frequently and loudly. Similarly, questions surface surrounding the sustainability of the euro as a single currency, due in part to the history of the euro. The infamous "Snake in the Tunnel" in the 1970s, the European Monetary System (EMS) in the 1980s, and the European Exchange Rate Mechanism (ERM) in the 1990s all preceded the birth of the euro. These systems each provided varying degrees of currency flexibility, while simultaneously tying the nations’ exchange rate policies together. 1 Present Challenges: Looking Forward while Peering Back Recent CFS research replicated the experience of earlier European exchange rate regimes by synthetically creating individual member nations' currencies. 2 The research tracked how the individual exchange rates performed over time, whether they meaningfully lost competitiveness due to the constraint of being part of the euro, as well as contemplated implications for macro policy. 3 The conclusions were clear: • The euro can and should survive in close to its present form. • Greece and probably Portugal would benefit from exiting the euro. As our conclusions from December are more closely becoming reality with each passing day, evaluation of previous episodes of significant currency depreciation is warranted. Is Depreciation always Detrimental? With the possibility of a country exiting the euro, market participants and officials now need to assess the potential impact on financial markets and macro performance. History provides some guidance. Since 1990, there have been 25 episodes of meaningful currency depreciation - as defined by a decline in CFS real trade weighted currency indexes for 38 nations. 1 Goodman, Lawrence and Peter Pauly, “Equilibrium Properties of the European Monetary System” – University of Pennsylvania, Economic Department Working Paper, December 1986. 2 Austrian schilling-ATS, Belgian franc-BEF, Finnish markka-FIM, French franc-FRF, Deutsche mark-DEM, Greek drachma-GRD, Irish pound-IEP, Italian lira-ITL, Dutch guilder-NLG, Portuguese escudo-PTE, and Spanish peseta-ESP. 3 Goodman, Lawrence, “Does Math Support Euro Survival?” – Center for Financial Stability, December 5, 2011. 1120 Avenue of the Americas, 4th Floor New York, NY 10036 T 212.626.2660 www.centerforfinancialstability.org CENTER FOR FINANCIAL STABILITY Dialog Insight Solutions Figure 1. Episodes of Real Currency Depreciation since 1990 of >20% 0% -10% Italy (1993)Italy (1991) India Brazil (1999) Brazil China (1994) China Japan (1996) Japan Korea (1998) Korea Brazil (2002) Brazil (1992) Brazil Turkey (1994) Turkey (2001) Turkey (1991) Turkey Russia (Russia 1998) Mexico (1995) Mexico Ecuador (1999) Ecuador Sweden (1993)Sweden Thailand Thailand (1998) Colombia Colombia (2003) (1998)Malaysia Indonesia Indonesia (1998) Indonesia (2000) Argentina (2002) Venezuela (2002) Venezuela (1996) Venezuela Philippines Philippines (1998) South South Africa(2002) -20% -30% -40% -50% -60% Source: International Financial Statistics, Direction of Trade Statistics, and Center for Financial Stability. Interestingly, most nations (14) actually demonstrated better economic growth in the three years after the currency depreciation relative to the three years before the exchange rate shift. In these cases of extreme foreign exchange rate depreciation, growth averaged 4.7% per annum in the three years following the weakening of the currency. In the three years prior to the depreciation, GDP growth averaged 2.8%. The longer-term improvement came at a cost. GDP typically fell by 2.1% in the year coincident with the currency depreciation. Figure 2. GDP Growth: Impact of Real Currency Depreciations of >20% 7 Average Growth 3 years AFTER currency devaluation, 4.7% 6 5 Average Growth 3 years prior to 4 currency devaluation, 2.8% 3 2 1 0 -3 -2 -1 0 1 2 3 -1 -2 GDP falls on average in the immediate -3 aftermath of a currency devaluation, -2.1% Source: International Financial Statistics, Direction of Trade Statistics, and Center for Financial Stability. -2- CENTER FOR FINANCIAL STABILITY Dialog Insight Solutions Conclusions Ongoing stress in European financial markets is not surprising and will likely continue. Fortunately, exchange rate regime shifts often unleash favorable macroeconomic outcomes under the right circumstances. Thus, any exit from the euro must be accompanied by a well sculpted alternative exchange rate regime and macro policy mix. With thanks to Jeff van den Noort for extensive use of technology and computer programming in developing CFS models and to Bruce Tuckman and Robin Lumsdaine for comments. CFS real effective exchange rate data for synthetic euro component currencies are available at: www.CenterforFinancialStability.org/euro.php The Center for Financial Stability (CFS) is a private, nonprofit institution focusing on global finance and markets. Its research is nonpartisan. This publication reflects the judgments and recommendations of the author(s). They do not necessarily represent the views of Members of the Advisory Board or Trustees, whose involvement in no way should be interpreted as an endorsement of the report by either themselves or the organizations with which they are affiliated. -3- .
Recommended publications
  • Interest Rate Spreads Implicit in Options: Spain and Italy Against Germany*
    Interest Rate Spreads Implicit in Options: Spain and Italy against Germany* Bernardino Adão Banco de Portugal Universidade Católica Portuguesa and Jorge Barros Luís Banco de Portugal University of York Abstract The options premiums are frequently used to obtain probability density functions (pdfs) for the prices of the underlying assets. When these assets are bank deposits or notional Government bonds it is possible to compute probability measures of future interest rates. Recently, in the literature there have been many papers presenting methods of how to estimate pdfs from options premiums. Nevertheless, the estimation of probabilities of forward interest rate functions is an issue that has never been analysed before. In this paper, we propose such a method, that can be used to study the evolution of the expectations about interest rate convergence. We look at the cases of Spain and Italy against Germany, before the adoption of a single currency, and conclude that the expectations on the short-term interest rates convergence of Spain and Italy vis-à-vis Germany have had a somewhat different trajectory, with higher expectations of convergence for Spain. * Please address any correspondence to Bernardino Adão, Banco de Portugal, Av. Almirante Reis, n.71, 1150 Lisboa, Portugal. I. Introduction Derivative prices supply important information about market expectations. They can be used to obtain probability measures about future values of many relevant economic variables, such as interest rates, currency exchange rates and stock and commodity prices (see, for instance, Bahra (1996) and SCderlind and Svensson (1997)). However, many times market practitioners and central bankers want to know the probability measure of a combination of economic variables, which is not directly associated with a traded financial instrument.
    [Show full text]
  • The Future of the Euro: the Options for Finland
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Kanniainen, Vesa Article The Future of the Euro: The Options for Finland CESifo Forum Provided in Cooperation with: Ifo Institute – Leibniz Institute for Economic Research at the University of Munich Suggested Citation: Kanniainen, Vesa (2014) : The Future of the Euro: The Options for Finland, CESifo Forum, ISSN 2190-717X, ifo Institut - Leibniz-Institut für Wirtschaftsforschung an der Universität München, München, Vol. 15, Iss. 3, pp. 56-64 This Version is available at: http://hdl.handle.net/10419/166578 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Special The think tank held that the foreseen political union THE FUTURE OF THE EURO: including the banking union and fiscal union will push THE OPTIONS FOR FINLAND the eurozone towards a sort of practical federal state, referred to as the ‘weak federation’.
    [Show full text]
  • Europe Without the EU? by Filippo L
    Europe without the EU? by Filippo L. Calciano1, Paolo Paesani2 and Gustavo Piga3 Policy Brief 1 Introduction The aim of this paper is to conduct a simple albeit daring exercise in counterfactual history: we discuss what the consequences for European countries would be, in the midst of the current economic crisis, if the European Union did not exist. The EU is both a monetary union and a political and institutional union, and in this study we consider both aspects. As a monetary union, the EU manages the common currency, the euro, through the actions of the European Central Bank (ECB). As a political union the EU serves many purposes, the most important of which, with respect to the current economic crisis, is to provide a privileged forum to coordinate Member States’ anti-crisis policies. As a matter of fact, since the beginning of the cr isis, European leaders have held numerous European Council meetings as well as preparatory G-8 and G-20 meetings, confirming the urgent need for policy coordination and cooperation both at EU and international level. In this study we pose and answer the following two questions: 1. What would the consequences of the current crisis be for European countries if the euro had not been introduced ten years ago; that is, if European Monetary Union (EMU) had failed? 1 CORE, Université Catholique de Louvain-la-Neuve, and Department of Economics, University of Rome 3, email: fi[email protected]. 2 Department of Economics, University of Rome 2, email: [email protected]. 3 Department of Economics, University of Rome 2, corresponding author, email: [email protected].
    [Show full text]
  • Country Codes and Currency Codes in Research Datasets Technical Report 2020-01
    Country codes and currency codes in research datasets Technical Report 2020-01 Technical Report: version 1 Deutsche Bundesbank, Research Data and Service Centre Harald Stahl Deutsche Bundesbank Research Data and Service Centre 2 Abstract We describe the country and currency codes provided in research datasets. Keywords: country, currency, iso-3166, iso-4217 Technical Report: version 1 DOI: 10.12757/BBk.CountryCodes.01.01 Citation: Stahl, H. (2020). Country codes and currency codes in research datasets: Technical Report 2020-01 – Deutsche Bundesbank, Research Data and Service Centre. 3 Contents Special cases ......................................... 4 1 Appendix: Alpha code .................................. 6 1.1 Countries sorted by code . 6 1.2 Countries sorted by description . 11 1.3 Currencies sorted by code . 17 1.4 Currencies sorted by descriptio . 23 2 Appendix: previous numeric code ............................ 30 2.1 Countries numeric by code . 30 2.2 Countries by description . 35 Deutsche Bundesbank Research Data and Service Centre 4 Special cases From 2020 on research datasets shall provide ISO-3166 two-letter code. However, there are addi- tional codes beginning with ‘X’ that are requested by the European Commission for some statistics and the breakdown of countries may vary between datasets. For bank related data it is import- ant to have separate data for Guernsey, Jersey and Isle of Man, whereas researchers of the real economy have an interest in small territories like Ceuta and Melilla that are not always covered by ISO-3166. Countries that are treated differently in different statistics are described below. These are – United Kingdom of Great Britain and Northern Ireland – France – Spain – Former Yugoslavia – Serbia United Kingdom of Great Britain and Northern Ireland.
    [Show full text]
  • Lessons from the European Monetary System
    Federal Reserve Bank of Cleveland August 15, 1987 exchange-rate considerations. Because been compromised by exchange-rate many facets of policymaking and imple- of Germany's economic importance volatility of nonparticipating currencies mentation. The slow progress of the ISSN 0428·127 within the European Community, the vis-a-vis the ERM currencies. European community with respect to the other participant countries have had to In particular, the Deutsche mark tends ERM and policy coordination, however, adjust their domestic policies or their to appreciate against other European exemplifies the difficulties of achieving exchange rates to remain competitive in currencies when the dollar depreciates. 9 agreements on these many points. Im- international markets under the con- The January 1987 realignment in the plementing target zones on a wider scale ECONOMIC Lessons from the straint of German monetary policy. ERM, for example, was necessitated in would be all the more difficult. Differ- Nations participating in the ERM large part because the dollar's deprecia- ences in preferences, policy objectives, European Monetary arrangement often buy and sell foreign tion against the Deutsche mark caused and economic structures account in part System currencies to defend their exchange the mark to appreciate relative to the for these difficulties. rates. Unfortunately, when such inter- other currencies in the ERM. Such re- More fundamentally, however, coor- by Nicholas V. Karamouzis vention is not supported by a change in a COMMENTARY alignments become necessary because dination of macroeconomic policies will nation's monetary policy, nor coordi- international investors do not hold all not necessarily benefit all participant nated with the intervention activities of ERM currencies in equal proportions in countries equally, and those that benefit other central banks, it only has a limited their portfolios and because of economic the most may not be willing to compen- influence on exchange rates.
    [Show full text]
  • 'The Birth of the Euro' from <I>EUROPE</I> (December 2001
    'The birth of the euro' from EUROPE (December 2001-January 2002) Caption: On the eve of the entry into circulation of euro notes and coins on January 1, 2002, the author of the article relates the history of the single currency's birth. Source: EUROPE. Magazine of the European Union. Dir. of publ. Hélin, Willy ; REditor Guttman, Robert J. December 2001/January 2002, No 412. Washington DC: Delegation of the European Commission to the United States. ISSN 0191- 4545. Copyright: (c) EUROPE Magazine, all rights reserved The magazine encourages reproduction of its contents, but any such reproduction without permission is prohibited. URL: http://www.cvce.eu/obj/the_birth_of_the_euro_from_europe_december_2001_january_2002-en-fe85d070-dd8b- 4985-bb6f-d64a39f653ba.html Publication date: 01/10/2012 1 / 5 01/10/2012 The birth of the euro By Lionel Barber On January 1, 2002, more than 300 million European citizens will see the euro turn from a virtual currency into reality. The entry into circulation of euro notes and coins means that European Monetary Union (EMU), a project devised by Europe’s political elite over more than a generation, has finally come down to the street. The psychological and economic consequences of the launch of Europe’s single currency will be far- reaching. It will mark the final break from national currencies, promising a cultural revolution built on stable prices, enduring fiscal discipline, and lower interest rates. The origins of the euro go back to the late 1960s, when the Europeans were searching for a response to the upheaval in the Bretton Woods system, in which the US dollar was the dominant currency.
    [Show full text]
  • Exchange Rate Policy and Disinflation: the Spanish Experience in the ERM
    Exchange Rate Policy and Disinflation: The Spanish Experience in the ERM Philippe Bacchetta 1. INTRODUCTION PAIN is certainly one of the Western European countries that has experienced the most dramatic changes in the past 20 years. In addition to a political shift from dictatorship to democracy in the mid-1970s, the economic structure has been deeply reformed. These changes, including the process of European integration, have been generally beneficial to the nation. However, they have also posed important policy challenges. This has been particularly the case for monetary policy. The Spanish central bank, the Banco de Espan˜a, has been concerned with two major objectives associated with European monetary integration. The first and most important goal is nominal convergence, i.e. a reduction of inflation to reach German standards. The second objective is exchange rate stabilisation with respect to other currencies in the European Union (EU). The challenge has been to reconcile these aims with a rapidly changing economy affected in particular by trade, financial and capital account liberalisations. A specific problem has been the presence of significant capital inflows in the late 1980s. These inflows were caused by two main factors: first, the various reforms and especially EU membership in 1986; second, a tight monetary policy with high interest rates. Overall, the monetary policy challenge has been met only with mixed results. A strategy of exchange rate stabilisation was followed between 1987 and 1992, including membership in the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS) after June 1989. This strategy appeared successful in the PHILIPPE BACCHETTA is from Studienzentrum Gerzensee, Switzerland, the Institut d’Ana´lisi Econo`mica (CSIC), Barcelona and CEPR, London.
    [Show full text]
  • 'Foreign Exchange Markets Welcome the Start of the EMS' from Le Monde (14 March 1979)
    'Foreign exchange markets welcome the start of the EMS' from Le Monde (14 March 1979) Caption: On 14 March 1979, the day after the implementation of the European Monetary System (EMS), the French daily newspaper Le Monde describes the operation of the EMS and highlights its impact on the European currency exchange market. Source: Le Monde. dir. de publ. Fauvet, Jacques. 14.03.1979, n° 10 612; 36e année. Paris: Le Monde. "Le marché des changes a bien accueilli l'entrée en vigueur du S.M.E.", auteur:Fabra, Paul , p. 37. Copyright: (c) Translation CVCE.EU by UNI.LU All rights of reproduction, of public communication, of adaptation, of distribution or of dissemination via Internet, internal network or any other means are strictly reserved in all countries. Consult the legal notice and the terms and conditions of use regarding this site. URL: http://www.cvce.eu/obj/foreign_exchange_markets_welcome_the_start_of_the_ems _from_le_monde_14_march_1979-en-c5cf1c8f-90b4-4a6e-b8e8-adeb58ce5d64.html Last updated: 05/07/2016 1/3 Foreign exchange markets welcome the start of the EMS With a little more than three months’ delay, the European Monetary System (EMS) came into force on Tuesday 13 March. The only definite decision taken by the European Council, it was announced in an official communiqué published separately at the end of Monday afternoon. In the official text, the European Council stated that ‘all the conditions had now been met for the implementation of the exchange mechanism of the European Monetary System.’ As a result, the eight full members of the exchange rate mechanism, i.e. all the EEC Member States except for the United Kingdom, which signed the agreement but whose currency will continue to float, have released their official exchange rates.
    [Show full text]
  • Three Essays on European Union Advances Toward a Single Currency and Its Implications for Business and Investors Charlotte Anne Bond Old Dominion University
    Old Dominion University ODU Digital Commons Theses and Dissertations in Business College of Business (Strome) Administration Winter 1998 Three Essays on European Union Advances Toward a Single Currency and Its Implications for Business and Investors Charlotte Anne Bond Old Dominion University Follow this and additional works at: https://digitalcommons.odu.edu/businessadministration_etds Part of the Finance and Financial Management Commons, International Business Commons, and the International Relations Commons Recommended Citation Bond, Charlotte A.. "Three Essays on European Union Advances Toward a Single Currency and Its Implications for Business and Investors" (1998). Doctor of Philosophy (PhD), dissertation, , Old Dominion University, DOI: 10.25777/mc19-6f14 https://digitalcommons.odu.edu/businessadministration_etds/77 This Dissertation is brought to you for free and open access by the College of Business (Strome) at ODU Digital Commons. It has been accepted for inclusion in Theses and Dissertations in Business Administration by an authorized administrator of ODU Digital Commons. For more information, please contact [email protected]. Three Essays on European Union Advances Toward A Single Currency and its Implications for Business and Investors by Charlotte Anne Bond A dissertation submitted to the Faculty of Old Dominion University in partial fulfillment of the requirements for the degree of Doctor o f Philosophy (Finance) Old Dominion University College of Business Norfolk, Virginia (December 1998) Approved by: Mohammad Najand (Committee Chair) \ tee Member) Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UMI Number: 9921767 Copyright 1999 by Bond, Charlotte Anne All rights reserved. UMI Microform 9921767 Copyright 1999, by UMI Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code.
    [Show full text]
  • WM/Refinitiv Closing Spot Rates
    The WM/Refinitiv Closing Spot Rates The WM/Refinitiv Closing Exchange Rates are available on Eikon via monitor pages or RICs. To access the index page, type WMRSPOT01 and <Return> For access to the RICs, please use the following generic codes :- USDxxxFIXz=WM Use M for mid rate or omit for bid / ask rates Use USD, EUR, GBP or CHF xxx can be any of the following currencies :- Albania Lek ALL Austrian Schilling ATS Belarus Ruble BYN Belgian Franc BEF Bosnia Herzegovina Mark BAM Bulgarian Lev BGN Croatian Kuna HRK Cyprus Pound CYP Czech Koruna CZK Danish Krone DKK Estonian Kroon EEK Ecu XEU Euro EUR Finnish Markka FIM French Franc FRF Deutsche Mark DEM Greek Drachma GRD Hungarian Forint HUF Iceland Krona ISK Irish Punt IEP Italian Lira ITL Latvian Lat LVL Lithuanian Litas LTL Luxembourg Franc LUF Macedonia Denar MKD Maltese Lira MTL Moldova Leu MDL Dutch Guilder NLG Norwegian Krone NOK Polish Zloty PLN Portugese Escudo PTE Romanian Leu RON Russian Rouble RUB Slovakian Koruna SKK Slovenian Tolar SIT Spanish Peseta ESP Sterling GBP Swedish Krona SEK Swiss Franc CHF New Turkish Lira TRY Ukraine Hryvnia UAH Serbian Dinar RSD Special Drawing Rights XDR Algerian Dinar DZD Angola Kwanza AOA Bahrain Dinar BHD Botswana Pula BWP Burundi Franc BIF Central African Franc XAF Comoros Franc KMF Congo Democratic Rep. Franc CDF Cote D’Ivorie Franc XOF Egyptian Pound EGP Ethiopia Birr ETB Gambian Dalasi GMD Ghana Cedi GHS Guinea Franc GNF Israeli Shekel ILS Jordanian Dinar JOD Kenyan Schilling KES Kuwaiti Dinar KWD Lebanese Pound LBP Lesotho Loti LSL Malagasy
    [Show full text]
  • Analysis and Conversion Tools for Euro Currency Migration
    Analysis and Conversion Tools for Euro Currency Migration RAINER GIMNICH IBM Global Services, EMU Transition Services, D-70548 Stuttgart, Germany [email protected] SUMMARY The introduction of the single European currency (the euro), at the beginning of 1999, has presented a number of challenges, business opportunities and threats to a huge number of European organizations, companies and public administration offices. Euro migration is typically driven from business strategy and business process reengineering. However, the IT issues in implementing the companies’ euro strategy have turned out to be the key factor of the quality and success of the transition. Tools have been advocated as major accelerators in view of the complexity, resource constraints, and shortage of experts in many euro transition projects. Here, we concentrate on the tools aspects from a software reengineering point of view. We look into potential conversion strategies and methodology support. We derive tool requirements and consider the analysis and conversion tasks to be supported in more detail. 1. INTRODUCTION OF THE EURO At the European Union (EU) summit in Brussels in May 1998, the presidents of the EU member states have decided on the 'first wave' of countries to build the European Monetary Union (EMU). Now, ‘Euroland’ extends over 11 countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxemburg, the Netherlands, Portugal, and Spain (see Figure 1). From the remaining 4 EU countries, 3 had previously decided to consider joining EMU at some later point in time (Denmark, Sweden, and the U.K.) and one country has not yet met the qualifying criteria (Greece). We must keep in mind that the number of EU member countries is likely to increase.
    [Show full text]
  • Euron Tulevaisuus EN.Indd
    Edited by Vesa Kanniainen The Future of the Euro THE OPTIONS FOR FINLAND 1 2 The Future of the Euro THE OPTIONS FOR FINLAND VESA KANNIAINEN (EDITOR) PUBLISHER: LIBERA This report is based on a book with the same title, published in Finnish in Helsinki on 7 May 2014. The book is based on the work of EuroThinkTank, a group of 12 individuals with several years of background in academia, economic research, financial markets and investment banking. The group gathered in the facilities of the University of Helsinki during autumn 2013 and spring 2014 to evaluate the future of the euro and Finland’s future as a euro member. EUROTHINKTANK MEMBERS Vesa Kanniainen Jukka Ala-Peijari Elina Berghäll Markus Kantor Heikki Koskenkylä Pia Koskenoja Elina Lepomäki Tuomas Malinen Ilkka Mellin Sami Miettinen Peter Nyberg Stefan Törnqvist Short bios of the writers can be found at the end of this report. Copyright © 2014 Libera Foundation Libera is Finnish independent and politically unaffiliated think tank that supports and advances individual liberty, free enterprise, free markets and a free society. Libera publishes a variety of materials both online and in print, does research and organises events. Libera was founded in 2011 and is a privately funded, functional and non- profit foundation. This report is available for free downloading at www.libera.fi A Libera Report April 2014 Libera Foundation Sepänkatu 9, 00150 Helsinki www.libera.fi Publisher: Libera Design: Manual Agency ISBN 978-952-280-034-3 (pdf) Content PREFACE 5 INTRODUCTION 7 1. The European Monetary Union – A Political Project 9 1.1 INTEGRATION IN EUROPE – NO MORE WAR 9 1.2 AVERSION TOWARDS FLOATING EXCHANGE RATES 10 1.3 FINLAND AND SWEDEN CHOSE DIFFERENTLY 12 1.4 THE EURO CRISIS IS NOT OVER 12 2.
    [Show full text]