Thesis Replace EU Currency Field For Free

The European Monetary System (EMS) was established to stabilize inflation and stop large exchange rate fluctuations between these neighboring nations, with the intended goal of making it easy for them to trade goods with each other.

Poland does not meet 2 criteria of exchange rate stability and long-term interest rates. Moreover, Polish law is not completely compatible with the EU Treaties.

The 8 countries choose to use their own currency as a way to maintain financial independence on certain key issues. Those issues include setting monetary policy, dealing with issues specific to each country, handling national debt, modulating inflation, and choosing to devalue the currency in certain circumstances.

Denmark uses the krone as its currency and does not use the euro, having negotiated the right to opt out from participation under the Maastricht Treaty of 1992. In 2000, the government held a referendum on introducing the euro, which was defeated with 53.2% voting no and 46.8% voting yes.

Denmark is exempt from adopting the euro following the outcome of two national referendums. The first referendum, held in 1992, resulted in Denmark negotiating (amongst other things) an exemption from the usual requirement to adopt the euro as part of EU membership.

Why Switzerland Doesn't Use Euros. Switzerland is not a member of the EU. Instead, it has a series of agreements with the EU known as the Bilateral Agreements, which allow the country to participate in the EU's single market without membership in the EU economic and monetary union.

The euro area does not meet the criteria of wage and price flexibility in its single cur- rency area. You can see from Figure 3 and 4 and table 1 that even with a single monetary policy and a strict inflation policy managed by ECB the euro area is not converging and differences between the members exist.