Why Have the Euro and the European Central Bank Been So Successful Essay

Why Have the Euro and the European Central Bank Been So Successful - Essay Example The researcher states that the population of the EU zone is slightly higher than the United States. So that, as a currency Euro is important for the development of the global economy. The use of Euro as a common currency by the member states of European Union (EU) will help in eliminating currency risks, transaction costs and narrow the interest spread in the member countries. The European Central bank (ECB) was created as an independent institution for the establishment of a common monetary policy. The researcher states that as a single European currency, Euro has succeeded in breaking barriers between people, markets and companies. It also saved Europe from the credit crisis that originated in US in 2007-08 that later spread worldwide. The success of Euro is evident from the strengthened political connections and turnaround of economic fortunes. It has acquired the second position after U.S. dollar in its use and position in the capital and international money market. For a currenc y circulating in the market for just four years, it is a remarkable achievement. The success of Euro can be attributed to the benefits derived from it some of which are mentioned in the study, such as boost in cross border trade, that is the main benefit of using Euro as a currency and improved planning and investment that was done to gain benefits in worldwide markets. The researcher then concluds that Euro has all the factors that are needed in a competitor of dollar but it still lacks the political power.