A Comprehensive Study on the eastern enlargment of the EU and the Euro as an international currency

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The euro became the legal tender in the twelve countries of the European Union in 2002 and the ten countries in Central and Eastern European countries (CEECs) etc. became the members of the Union in May 2004. Does the euro become a global international currency tantamount to the US dollar or a regional international currency in Europe? Firstly, the research team investigated how the euro was used on the foreign exchange markets in the world. Secondly, it investigated how the eastern enlargement could effect on the use of the euro as an international currency in CEECs. In 2003, the investigators published a book titled "the euro and the international currency system". The conclusions of the book was as follows: Based on the trennial foreign exchange survey published by the BIS and the other central banks participating in the investigation, the investigators showed that the euro was surely a regional international currency in Europe and the Euro time zone. Secondly, they drew the conclus … More ion that the character of the euro as a regional international currency would not change in the foreseeable future. Because the euro does not enjoy the surroundings. The Deutsche mark became a European international currency in the 1990s with the help of the stable foreign exchange rate mechnism in the European Monetary System. Surrounded by the wealthy nations, the D-Mark worked mainly as a vehicle currency in Europe. Though the euro is also a regional international currency, it cannot enjoy such wealthy countries in its surroundings. On the global scene, the US dollar will be able to enjoy its global internationla currency because of the inetia effect of the international currency and its network externalities. So, the euro will not be invade the dollar arena. Thirdly, the euro will strengthen its role as an international currency in the CEECs based on the close economic connection with the CEECs. The euro is a political currency on the agreement of the EU nations and an aritificial currency without state which manage the euro. So, the CEECs will join the euro area in the near future. The euro area will enlarge, but the euro as an international currency will weaken itself because the CEECs will not use the euro as an international currency any more.However. the Euronean monetary cooperation based on the ERM and the ECU will give suggestions to a coming Less