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The European Economic and Monetary Union


             The European Union has a very particular way of selecting who can qualify for the European Economic and Monetary Union. All countries that satisfied the public deficit and interest rate criterion passed the qualifications. For countries to qualify for adopting the euro, they have to have sustained an inflation rate high enough to put up to the standards of other countries. Of course qualifications are not bias to just those countries that have high price stability inflations. And the countries that qualified do not only have to have an increasing inflation rate but the need to sustain it. At least every two years the European Central Bank Commission call for a meeting to see the progress made and if the member states are fulfilling their obligations with regards to the standards of the Economic and Monetary Union.
             There are stages that states have to go through before they qualify for adopting the single currency. Among these are the debt criterion and the deficit criterion. These criteria are all a part of the Stability and Growth Pact of the European Union member states. The stability and growth pact also covers the government deficit which is the amount by which government spending exceeds government income within a given year. The Stability and Growth Pact requires governments to ensure that their yearly deficits do not exceed 3% of their total annual production, thus keeping their economies balanced. By keeping economies balanced, the European Union would not have a problem when they implement the single currency. Countries who adopted the single currency and members of the European Union submit their budgetary plans to the European Commission who assesses them annually. .
             There is also the public debt which is the total amount of accumulated government deficit. Then government spending exceeds government income, the government concerned has to borrow money or raise taxes to fill the gap.


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