Reconsidering the Euro

Reconsidering the Euro - Michael Samuels 12/4/08 IBUS 160...

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Michael Samuels 12/4/08 IBUS 160 Helm Reconsidering the Euro At its inception several countries rejected switching to the Euro, the common currency of many of the members in the European Union. Recently, due to the current global economic crisis, several countries in Europe are reconsidering that position. Poland, Iceland, and Denmark, amongst others, are the countries considering the change. Poland, an emerging market which has been on the brink of becoming a more developed country, has seen its currency shattered as fears of the economic downturn have grown. Many mortgage companies have begun taking loans out in Euros, due to the stableness it has shown relative to other currencies. The Euro uses a flexible exchange rate and can use monetary policy to dictate the strength of the currency. The idea of “flight to quality” as stated is taking place in the region. The smaller countries, like Poland, could be at less of a risk in the future if it adopted the Euro. Poland, along with Hungary, already voted to adopt the Euro as its national currency by 2012. Iceland, boarding on bankruptcy and recently receiving bailout funds from the
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Reconsidering the Euro - Michael Samuels 12/4/08 IBUS 160...

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