Main Points:
1. Established the European Union, forming a union of states and peoples, demonstrating consistency and solidarity between the member states. Recognized that despite the differences between European nations, there was a distinctly European identity shared by all member states.
2. Established a common currency, the Euro, for all member states, which would tie the economies of all member states together. This is significant because inflation or deflation of the Euro, or any other economic activity for that matter, would significantly affect all the economies of the European Union. In addition to a common currency, the treaty broke down barriers to trade within the Union in order to stimulate all the economies of member states.
3. Mandated sustainable fiscal policies by the member states, including the maintenance of a debt no larger than 60% of that country’s GDP, and annual deficits no larger than 3% of that country’s GDP. Since the economies of all member countries would be tied to a single currency, it was very important to establish guidelines for successful and sustainable fiscal policies. An economic disaster in one state could lead to a continent-wide depression.
Questions:
1. What were some of the major challenges in switching all of these economies to the Euro from their original currencies, and what was the time frame in which the switch occurred?
2. What was the primary impetus for the formation of the European Union, since trade agreements in Europe had already existed for decades?
Observation:
The European Union began with twelve member states, and has grown to include 28 members since its inception. There are more states waiting to join the Union, perhaps most notably Turkey.
The European Union was born out of the World War II era. The war was extremely expensive for many of the active countries in Europe and destroyed a large part of the economy. The EU brought these war-torn countries together and set up a foundation for the construction of Europe’s future.
Especially since the European Union was created after such horrific events in Europe’s history, it is important to acknowledge why so many nations have not joined the EU despite efforts. With regards to Turkey, they have been denied because of their treatment of the Kurdish people in their country. Nations have also been denied because of their refusal to abolish the death penalty. After WWII, the commitment to upholding ethical standards for this union is vital to its ability to thrive.
I thought it was interesting that Turkey has been waiting to join the Union, especially considering the ethical issues the country has had in the past. I like the question about currency and how that could affect the economical situation of the countries as it switches.