European Monetary Union (Revision Webinar Video) | tutor2u Economics
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European Monetary Union (Revision Webinar Video)

  • Levels: A Level, IB
  • Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC

Here is a video recording of an A-level economics revision webinar on aspects of European Monetary Union.

  • Monetary union is a deeper form of integration
  • The single European currency, the euro, was introduced in 1999 and came into common circulation in January 2002
  • No country has yet left the Euro Area
  • As of May 2017, there are nineteen member nations
  • Of the 28 EU countries (the UK leaves in 2019), 9 are not part of the single currency including Denmark, Hungary, the Czech Republic and Poland
European Monetary Union (Revision Webinar Video)

Key problems facing the Euro Area economy

  • High structural unemployment + hysteresis effects
  • High levels of government debt + high bond yields for some
  • Risks from price deflation
  • Persistently low aggregate demand / spare capacity
  • Fragile banking sector (non-performing loans)
  • Weak capital investment – some diverting to emerging Asia
  • Big trade / current account imbalances 
  • Political tensions and ongoing refugee crisis
  • Declines in subjective wellbeing + rise in poverty

Where next for the Euro Area?

  • Politics takes centre stage in 2017 (Austria, Holland, France and Germany all have key elections)
  • Euro Area is showing stronger (cyclical) growth and falling unemployment with a reduced risk of deflation
  • Is this enough for countries to climb out of the debt crisis?
  • Banking systems remain fragile (especially in Italy)
  • Eurozone’s periphery is still in deep crisis
  • Need for structural economic reforms remains
  • Changing centre of global economic gravity is accelerating
  • Big risk is that hysteresis effects of collapse in investment, structural unemployment and impact of rising inequalities and socio-economic insecurity will damage Europe’s trend growth and the potential to raise living standards.
European Monetary Union

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