Economic and Monetary Union
An economic and monetary union is a type of trade bloc which is composed of a single market with a common currency. It is to be distinguished from a mere currency union, which does not involve a single market. This is the last stage of economic integration.
What are economic unions?
An economic and currency union, which requires a high degree of political consensus between member states, aims at full economic integration through a common economic policy, a common currency, and the social policy.
EU are multilateral agreements among sovereign countries/jurisdictions to foster greater economic integration through either coordination or cooperation procedures. Conceptually, the definition of economic unions is derived by allowing one or more of the elements associated with a national economic territory be shared between different countries/jurisdictions. These elements include:
(1) The free movements of goods and services within the EU and a common tax regime for imports from non-EU countries
(2) The free movement of capital within the EU
(3) The free movement of (individual and legal) persons within the EU. It also includes
(4) The setting-up of specific regional institution in charge of the functioning of the EU under points (1) to (3). – Supra National institutions.
(5) Some sort of political goals.
- National economic policies of members are to be harmonized, but no need newer become absolutely identical.
EMU. A monetary union in Europe which succeeded the European Monetary System. This union began to take effect in 1990, over a series of three steps. The first step abolished individual member exchange rate control, the second step established the European Central Bank, and the third step created the Euro as the common currency.
· An economic and monetary union is a type of trade block which is composed of single market with a common currency.
· It is to be distinguished from a mere currency union
· This is the fifth stage of economic integration, EMU is established through a currency – related trade pact
· Example - EMU
Asian currency unit
Foreign currency deposits in a bank in an Asian country. For example, US dollar or Pound sterling deposits in a Japanese bank are Asian dollars and Asian pounds respectively.
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