Question

Describe the rules and membership status of the European Monetary Union.

Answer 1

The european monetary union plays a significant role in cohesing the European economy with moneatry and fiscal policies and implementing one currency for its member nations. Integration of economy opens the door to economic growth and employment which helps in stabilising the economy with a single operating market. It aims to stabilise the large exchange rate fluctuation rate with different national currencies and prevent inflation among member countries.

The Europeann Monetary Union integrates the memebers of European Union economically by establishing a common currency i.e euro which helps in stabilising the exchange rate with different national currencies.To become a member of the European Monetary Union, the state must have a functioning economy, democratic governance and a firm believer of human rights. The members states of the european monetary union are required to provide a percentage of money to this union in order to carry out international trade, help to mitigate the financial crisis faced by the member states, enviornmental protection, for its security etc. The member country of European monetary union should not be under any deficit and it should not exceed reference value of the treaty of Maastricht which is 3% of GDP. Besides the inflation rate of its member countries must not surpass the 1.5 % points of the best three performing countries.