IB 11.30 - -People worry today if the Euro is strong enough...

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IB 11/30 Continuation from Monday’s lecture NAFTA dispute mechanism and a couple of cases - because participation is voluntary countries can always threaten to leave - mexico and US trade has increased. People argue there should not be discrimination between the goods and distribution. There is a rule in place for how Mexican truckers can bring in freight they only want American truck drivers to protect wages, standards, etc. Wednesday lecture History of the EU Economic Integration - Initially formed by 6 countries in 1951 as the European Coal and Steel Community - Became the EU in 1994 - When they became the EU you only needed one visa for Europe, it allowed for one larger, more efficient market. Most desirable for FDI and business travel. - Eliminates duplication of borders, etc. The sum of the parts is greater than them working separately. - Third stage of integration for the EU was the creation of the Euro.
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Unformatted text preview: -People worry today if the Euro is strong enough. There isn’t a true central bank to govern over the countries and guarantee trust. They do have a central bank but there is not a strong enough foundation.-Not an optimal currency area. You would want similar borrowing costs, rates of inflation, rates of growth, debt ratio, etc. among all countries but that is not the case with the EU.-If EU follows the guidelines they should have a more stable country in a few years-People are withdrawing cash from their accounts out of fear and there is smaller money supply and therefore banks must become smaller and may possibly lead to a recession-Relying on Germany and France to commit funds in the case that larger countries such as Italy and Portugal become bankrupt...
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This note was uploaded on 12/03/2011 for the course BUS 200 taught by Professor Tuli during the Fall '10 term at University of Wisconsin.

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