Reza Taufik A.
3EB13
21209504
Euro Currency
The advent of the
euro currency is a growing
phenomenon in the international monetary system
of the European countries that
affect international payments systems
and procedures. The euro officially launched since January 1, 1999 applies to most countries in Europe
with a population of approximately
290 million people, accounts for 19.4% of
the total value of world product. The
launch of the euro took place
almost four decades after the establishment of the European Common Market (European Common Market) and the
eight years since
French President Francois Mitterand and German Chancellor Helmut Kohl to urge the establishment of the European single currency (European Monetary Union = EMU)
at the European Summit
in Maastricht .
To realize the European single currency
there are five criteria
for membership of the European single currency which allows the countries supporting
merge its national currency, namely:
1. Characterized by price stability inflation rate not exceeding 1.5% inflation rate lowest in three members of the EMU.
2. The ratio of budget deficit not more than 3% of GDP.
3. The ratio of debt to GDP should not exceed 60%.
4. Exchange rate fluctuations on the basis of the normal margin of at least two years did not happen on their own initiative devaluation of currency in other European countries.
5. Long-term nominal interest rates should not exceed 2% points above the interest rate of three member states that have the best rate of inflation.
Embryonic European currency called the European Currency
Unit (ECU = European Currency Unit) is the value of the exchange rate is based
on the weight of each currency of all member countries in accordance with the
exchange rate respectively.
At the same time set its value
against the Euro at 1.16675 and the U.S. dollar against Japanese yen at 132.80.
Implications of the implementation of Euro to the economy of Indonesia will increase
price transparency in the EMU member countries because it has the same pricing standards.
Besides transactional component cost can be reduced due to the payment of
export without an intermediary currency in countries that apply the Euro. With
these conditions provide greater opportunities for economic actors in addition
to the international trade of export destinations for the European region becomes
more extensive and varied because it uses a more convertible currency. The
implementation of the Euro currency is also believed to stabilize the currencies
of European countries which in turn will encourage more economic growth climate
baik.kondisi like this could eventually increase the demand for export goods from
Indonesia while also increasing competition among exporting countries competing
for market in the European region. Thus the unification of European currencies will
increase export opportunities Indonesia means export activity becomes easier and
cheaper because with a more convertible currency exports can be more cost efficient.
As for the importers also provide economic benefits as it gives more room to
move freely for employers to distribute the risk of currency that has dominated
U.S. Dollars.
Reference Source :
• Imamudin Yuliadi, in his book "monetary economics" in 2008 terms. 35-36.
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