The European Union.

2. To promote freedom of movement

Another objective of the EU was to remove barriers to the free movement of goods, services, capital and people between countries in the European Union.  EU residents can live and work in any member country with the same conditions of employment, health care, and social security benefits as anyone else in that country.

3. To operate a Common Agricultural Policy (CAP)

This is to encourage EU member states producing their own food.  Farmers are guaranteed a high price for their produce by the EU government.    This however, makes some farmers to produce excess, which the EU Government has to buy.

4. To help less wealthy places in the EU

The EU regional policy provides money to less developed areas in the European Union, this is done by offering jobs and improving schools, housing, etc.

5. To set up a single European market

The Single European market was created on 1 January 1991.  This is to remove barriers to remove all barriers to movement and free trade like frontier checks, custom posts, importing documents, national product and safety standards, health checks, rates of VAT, excise duties and duty free allowances.

6. To make a economic and monetary union

This involves the creation of the European economic and monetary union (EMU), which  consists of the creation of a single currency (the euro) and common economic policy.

EMU (economic and monetary union)

This was to make countries in the EU have closer economic and monetary co-operation between their economies and governments.  EMU includes the creation of a single European currency (the euro).

The Maastricht Treaty

A three stage plan has been set up for the introduction of economic and monetary union across the EU.

1. Increased co-ordination of macroeconomic policies between EU members and completion of the internal market
2. A gradual transfer of economic decision making power from national central banks to the European Central Bank
3. Fixing the value of exchange rates between EU member currencies, a single European monetary policy and the eventual replacement of national currencies by the Euro

The United Kingdom and Denmark have opted out of stage 2 and 3.  Below is a map showing the location of countries that have joined the euro (euro zone) (shaded in yellow).  

 

Below are pictures of the euro notes and coins:

 

ECB         

The ECB was set up to maintain low and stable price inflation in the euro zone, it does this by controlling interest rates and monetary police in the euro area.  If the ECB reckons that price inflation will rise, it will probably increase interest rates, vice versa.  The ECB heads the ESCB, which consists of all the national central banks, which includes The Bank of England.

Should the UK join the euro?