<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The common currency was created as a result of theoretical considerations regarding the functioning of optimum currency areas. This theory refers to a number of benefits as well as costs. It imposes a number of requirements that are necessary for the newly created structure to be considered optimum. The economies of Eurozone countries did not meet these requirements. In consequence, the present functioning of the Eurozone encounters many disturbances - the strong differentiation of the balance of payments is a significant example. The reforms initiated in the European Union and undertaken in response to the financial crisis encompassed the Eurozone countries, yet they only concern financial policy. The adopted strategy of action arouses questions as to its effectiveness. The aim of this article is to present one of the reasons for the Eurozone crisis and a proposal for changing the monetary policy, in particular the exchange rate. In view of this objective, the main hypothesis reads as follows: one of the methods of counteracting the crisis is to introduce currency competition within the Eurozone.</p></abstract>

The common currency was created as a result of theoretical considerations regarding the functioning of optimum currency areas. This theory refers to a number of benefits as well as costs. It imposes a number of requirements that are necessary for the newly created structure to be considered optimum. The economies of Eurozone countries did not meet these requirements. In consequence, the present functioning of the Eurozone encounters many disturbances - the strong differentiation of the balance of payments is a significant example. The reforms initiated in the European Union and undertaken in response to the financial crisis encompassed the Eurozone countries, yet they only concern financial policy. The adopted strategy of action arouses questions as to its effectiveness. The aim of this article is to present one of the reasons for the Eurozone crisis and a proposal for changing the monetary policy, in particular the exchange rate. In view of this objective, the main hypothesis reads as follows: one of the methods of counteracting the crisis is to introduce currency competition within the Eurozone.

Currency Competition in the Eurozone: An Answer to the Crisis

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Currency Competition in the Eurozone: An Answer to the Crisis"}

The common currency was created as a result of theoretical considerations regarding the functioning of optimum currency areas. This theory refers to a number...

Currency Competition in the Eurozone: An Answer to the Crisis

Published Online: Feb 09, 2017

Page range: 12 - 20

Received: Sep 30, 2015

Accepted: Feb 24, 2016

DOI: https://doi.org/10.1515/fiqf-2016-0132

Keywords
European Union, Currency Competition, Financial Crisis

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Currency Competition in the Eurozone: An Answer to the Crisis

Published Online: Feb 09, 2017

Page range: 12 - 20

Received: Sep 30, 2015

Accepted: Feb 24, 2016

DOI: https://doi.org/10.1515/fiqf-2016-0132

KeywordsEuropean Union, Currency Competition, Financial Crisis

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
European Union, Currency Competition, Financial Crisis