Английская Википедия:Currency union
Шаблон:Short descriptionШаблон:Trade bloc
A currency union (also known as monetary union) is an intergovernmental agreement that involves two or more states sharing the same currency. These states may not necessarily have any further integration (such as an economic and monetary union, which would have, in addition, a customs union and a single market).
There are three types of currency unions:
- Informal – unilateral adoption of a foreign currency.[1]
- Formal – adoption of foreign currency by virtue of bilateral or multilateral agreement with the monetary authority, sometimes supplemented by issue of local currency in currency peg regime.
- Formal with common policy – establishment by multiple countries of a common monetary policy and monetary authority for their common currency.
The theory of the optimal currency area addresses the question of how to determine what geographical regions should share a currency in order to maximize economic efficiency.[2]
Advantages and disadvantages
Шаблон:More citations needed section Implementing a new currency in a country is always a controversial topic because it has both many advantages and disadvantages. New currency has different impacts on businesses and individuals, which creates more points of view on the usefulness of currency unions. As a consequence, governmental institutions often struggle when they try to implement a new currency, for example by entering a currency union.
Advantages
- A currency union helps its members strengthen their competitiveness on a global scale and eliminate the exchange rate risk.
- Transactions among member states can be processed faster and their costs decrease since fees to banks are lower.[3]
- Prices are more transparent and so are easier to compare, which enables fair competition.
- The probability of a monetary crisis is lower. The more countries there are in the currency union, the more they are resistant to crisis.
Disadvantages
- The member states lose their sovereignty in monetary policy decisions. There is usually an institution (such as a central bank) that takes care of the monetary policymaking in the whole currency union.
- The risk of asymmetric "shocks" may occur. The criteria set by the currency union are never perfect, so a group of countries might be substantially worse off while the others are booming.
- Implementing a new currency causes high financial costs. Businesses and also single persons have to adapt to the new currency in their country, which includes costs for the businesses to prepare their management, employees, and they also need to inform their clients and process plenty of new data.
- Unlimited capital movement may cause moving most resources to the more productive regions at the expense of the less productive regions. The more productive regions tend to attract more capital in goods and services, which might avoid the less productive regions.[4][5]
Convergence and divergence
Convergence in terms of macroeconomics means that countries have a similar economic behaviour (similar inflation rates and economic growth). It is easier to form a currency union for countries with more convergence as these countries have the same or at least very similar goals. The European Monetary Union (EMU) is a contemporary model for forming currency unions. Membership in the EMU requires that countries follow a strictly defined set of criteria (the member states are required to have a specific rate of inflation, government deficit, government debt, long-term interest rates and exchange rate). Many other unions have adopted the view that convergence is necessary, so they now follow similar rules to aim the same direction.
Divergence is the exact opposite of convergence. Countries with different goals are very difficult to integrate in a single currency union. Their economic behaviour is completely different, which may lead to disagreements. Divergence is therefore not optimal for forming a currency union.[6]
History
The first currency unions were established in the 19th century. The German Zollverein came into existence in 1834, and by 1866, it included most of the German states. The fragmented states of the German Confederation agreed on common policies to increase trade and political unity.
The Latin Monetary Union, comprising France, Belgium, Italy, Switzerland, and Greece, existed between 1865 and 1927, with coinage made of gold and silver. Coins of each country were legal tender and freely interchangeable across the area. The union's success made other states join informally.
The Scandinavian Monetary Union, comprising Sweden, Denmark, and Norway, existed between 1873 and 1905 and used a currency based on gold. The system was dissolved by Sweden in 1924.[7]
A currency union among the British colonies and protectorates in Southeast Asia, namely the Federation of Malaya, North Borneo, Sarawak, Singapore and Brunei was established in 1952. The Malaya and British Borneo dollar, the common currency for circulation was issued by the Board of Commissioners of Currency, Malaya and British Borneo from 1953 until 1967. Following the cessation of the common currency arrangement, Malaysia (the combination of Federation of Malaya, North Borneo, Sarawak), Singapore and Brunei began issuing their own currencies. Contemporarily, a currency reunion of these countries might still be feasible based on the findings of economic convergence.[8][9]
List of currency unions
Existing
Note: Every customs and monetary union and economic and monetary union also has a currency union.
Шаблон:Flag is theoretically in a currency union with four blocs as the South African rand, Botswana pula, British pound and US dollar freely circulate. The US Dollar was, until 2016, official tender.[17]
Additionally, the autonomous and dependent territories, such as some of the EU member state special territories, are sometimes treated as separate customs territory from their mainland state or have varying arrangements of formal or de facto customs union, common market and currency union (or combinations thereof) with the mainland and in regards to third countries through the trade pacts signed by the mainland state.[18]
Currency union in Europe
The European currency union is a part of the Economic and Monetary Union of the European Union (EMU). EMU was formed during the second half of the 20th century after historic agreements, such as Treaty of Paris (1951), Maastricht Treaty (1992). In 2002, the euro, a single European currency, was adopted by 12 member states. Currently, the Eurozone has 20 member states. The other members of the European Union are required to adopt the euro as their currency (except for Denmark, which has been given the right to opt out), but there has not been a specific date set. The main independent institution responsible for stability of the euro is the European Central Bank (ECB). Together with 15 national banks it forms the European System of Central Banks. The Governing Board consists of the Executive Committee of the ECB and the governors of individual national banks, and determines the monetary policy, as well as short-term monetary objectives, key interest rates and the extent of monetary reserves.[19]
Planned
| Community | Currency | Region | Target date | Notes |
|---|---|---|---|---|
| Шаблон:Flagicon East African Community | East African shilling | Africa | 2012 (not met), 2015 (not met), 2024[20] | |
| West African Monetary Zone | Eco | Africa | 2027 | Inside Economic Community of West African States, planned to eventually merge with West African franc |
| ASEAN+3 | Asian Monetary Unit Шаблон:Citation needed | Asia | ? | a free trade agreements matrix partially established |
| Шаблон:Flagicon image Cooperation Council for the Arab States of the Gulf | Khaleeji | Arabian Peninsula | ? | Oman and the United Arab Emirates do not intend to adopt the currency at first but will do at a later date. |
| Шаблон:Flagicon image African Economic Community | Afro or Afriq | Africa | 2028[21] | Planned for 2028 or later |
| Brazil, Argentina and possibly other countries | Sur | Latin America | ? | As Financial Times reports, Brazil and Argentina will announce in January 2023 that they are starting preparatory work on a common currency "Sur" (South). The initiative would later be extended to invite other Latin American nations.[22] |
Disbanded
- between Шаблон:Flagicon Bahrain and Шаблон:Flagicon Abu Dhabi using the Bahraini dinar
- between Шаблон:Flagicon Bahrain, Шаблон:Flagicon Kuwait, Шаблон:Flagicon image Oman, Шаблон:Flagicon Qatar and the Шаблон:Flagicon Trucial States, using the Gulf rupee from 1959 until 1966
- between Шаблон:Flagicon image Aden, Шаблон:Flag, Шаблон:Flagicon Bahrain, Шаблон:Flagicon image Kenya, Шаблон:Flagicon Kuwait, Шаблон:Flagicon image Oman, Шаблон:Flagicon Qatar, Шаблон:Flagicon British Somaliland, Шаблон:Flagicon the Trucial States, Шаблон:Flagicon image Uganda, Шаблон:Flagicon image Zanzibar and Шаблон:Flagicon British India (later independent Шаблон:Flagicon India) using the Indian rupee
- between Шаблон:Flagicon Belgium and the Шаблон:Flagicon Grand-Duchy of Luxemburg (Belgium-Luxembourg Economic Union) using the Belgian/Luxembourgish franc from 1921 to the Euro
- between Шаблон:Flagicon British India and the Шаблон:Flagicon Straits Settlements (1837–1867) using the Indian rupee
- between Шаблон:Flagicon Czech Republic and Шаблон:Flagicon Slovakia (briefly from January 1, 1993 to February 8, 1993) using the Czechoslovak koruna
- between Шаблон:Flagicon Ethiopia and Шаблон:Flagicon Eritrea using the Ethiopian birr
- between Шаблон:Flagicon France, Шаблон:Flagicon Monaco, and Шаблон:Flagicon Andorra using the French franc
- between Шаблон:Flagicon Austria-Hungary and Шаблон:Flagicon Liechtenstein using the Austro-Hungarian krone
- between the Eastern Caribbean, Шаблон:Flagicon image Jamaica, Шаблон:Flagicon image Barbados, Шаблон:Flagicon image Trinidad and Tobago and Шаблон:Flagicon British Guiana using the British West Indies dollar
- between the Eastern Caribbean, Шаблон:Flagicon image Barbados, Шаблон:Flagicon image Trinidad and Tobago and Шаблон:Flagicon British Guiana using the Eastern Caribbean dollar
- between Шаблон:Flagicon Italy, Шаблон:Flagicon Vatican City, and Шаблон:Flagicon San Marino using the Italian lira
- between Шаблон:Flagicon Jamaica and the Шаблон:Flagicon Cayman Islands using the Jamaican pound and later Jamaican dollar
- between Шаблон:Flagicon image Kenya, Шаблон:Flagicon image Uganda, and Шаблон:Flagicon image Zanzibar using the East African rupee
- between Шаблон:Flagicon image Kenya, Шаблон:Flagicon image Uganda, and Шаблон:Flagicon image Zanzibar (and later Шаблон:Flag) using the East African florin
- between Шаблон:Flagicon Kenya, Шаблон:Flag and Шаблон:Flagicon Zanzibar (later merged as Шаблон:Flagicon Tanzania), Шаблон:Flagicon Uganda, Шаблон:Flagicon South Arabia, Шаблон:Flagicon British Somaliland and Шаблон:Flagicon image Italian Somaliland using the East African shilling
- Latin Monetary Union (1865–1927), initially between Шаблон:Flagicon France, Шаблон:Flagicon Belgium, Шаблон:Flagicon Italy and Шаблон:Flagicon Switzerland, and later involving Шаблон:Flagicon Greece,[23] Шаблон:Flagicon Romania, Шаблон:Flag and other countries.
- between Шаблон:Flagicon Liberia and the Шаблон:Flagicon United States using the United States dollar
- between Шаблон:Flagicon Mauritius and Шаблон:Flagicon Seychelles using the Mauritian rupee
- between Шаблон:Flagicon image Nigeria, Шаблон:Flagicon image the Gambia, Шаблон:Flagicon image Sierra Leone, Шаблон:Flagicon the Gold Coast and Шаблон:Flagicon Liberia using the British West African pound
- between Шаблон:Flagicon Prussia and the North German states (1838–1857) using the North German thaler
- between Шаблон:Flagicon Russia and the Шаблон:Flagicon image former Soviet republics (1991–1993) using the Soviet ruble
- between Шаблон:Flagicon Qatar and all the emirates of the Шаблон:Flagicon United Arab Emirates, except Abu Dhabi using the Qatari and Dubai riyal
- between Шаблон:Flagicon Saudi Arabia and Шаблон:Flagicon Qatar using the Saudi riyal
- between Шаблон:Flagicon image Western Samoa and Шаблон:Flagicon New Zealand using the New Zealand pound
- Scandinavian Monetary Union (1870s until 1924), between Шаблон:Flagicon Denmark, Шаблон:Flagicon Norway and Шаблон:Flagicon Sweden[23]
- between the Шаблон:Flagicon Solomon Islands, Шаблон:Flagicon Papua New Guinea and Шаблон:Flagicon Australia using the Australian dollar
- between Шаблон:Flagicon Australia, Шаблон:Flagicon image Papua, Шаблон:Flagicon image New Guinea, Шаблон:Flagicon image Nauru, Шаблон:Flagicon image the Solomon Islands, and Шаблон:Flagicon image the Gilbert and Ellice Islands using the Australian pound
- between Шаблон:Flagicon image Bavaria, Шаблон:Flagicon image Baden, Шаблон:Flagicon image Württemberg, Шаблон:Flagicon image Frankfurt, and Шаблон:Flagicon image Hohenzollern using the South German guilder
- between Шаблон:Flagicon Spain and Шаблон:Flagicon Andorra using the Spanish peseta
- between Шаблон:Flagicon Trinidad and Tobago and Шаблон:Flagicon Grenada using the Trinidad and Tobago dollar
- between Шаблон:Flagicon Brunei, Шаблон:Flagicon Malaysia, and Шаблон:Flagicon Singapore (1953–1967) using the Malaya and British Borneo dollar
- between Шаблон:Flagicon image Cambodia, Шаблон:Flagicon image Laos, Шаблон:Flagicon image Guangzhouwan, Шаблон:Flagicon image Annam, Шаблон:Flagicon image Tonkin, and Шаблон:Flagicon image Cochinchina (later Шаблон:Flagicon Vietnam) between 1885 and 1952 using the French Indochinese piastre
- between Шаблон:Flag, Шаблон:Flagicon South West Africa, and Шаблон:Flagicon image Bechuanaland (later independent Шаблон:Flagicon Botswana) using the South African rand
- between Шаблон:Flagicon Egypt, Шаблон:Flagicon image Anglo-Egyptian Sudan, and Шаблон:Flagicon image Mandatory Palestine (until 1926) using the Egyptian pound
- between Шаблон:Flagicon West Germany and Шаблон:Flagicon East Germany between 1 July 1990 and 3 October 1990, as part of a temporary, so-called "Monetary, Economic and Social Union" prior to German reunification.
- between what ultimately became the Шаблон:Flagicon Republic of Ireland and the Шаблон:Flagicon United Kingdom, between 1928 and 1979. The Irish Pound was held at exactly the same value as Sterling for this period, although it was not accepted for payments in the UK.
- Yen Bloc (between 1905 and 1945), between the Шаблон:Flagicon Empire of Japan, the Шаблон:Flagicon Korean Empire, Шаблон:Flagicon Manchukuo, Шаблон:Flagicon Mengjiang, the Шаблон:Flagicon Wang Jingwei regime, and Japanese-occupied Southeast Asia prior to and during World War II.
Never materialized
- proposed Pan-American monetary union – abandoned in the form proposed by Argentina
- proposed monetary union between the Шаблон:Flagicon United Kingdom and Шаблон:Flagicon Norway using the pound sterling during the late 1940s and early 1950s
- proposed gold-backed, pan-African monetary union put forward by Muammar Gaddafi prior to his death
See also
References
Further reading
- Acocella, N. and Di Bartolomeo, G. and Tirelli, P. [2007], ‘Monetary conservatism and fiscal coordination in a monetary union’, in: ‘Economics Letters’, 94(1): 56–63.
- Шаблон:Cite encyclopedia
External links
- West Africa opts for currency union
- Economist- Antipodean currencies (Australia and New Zealand)
- Reasons for the collapse of the Rouble Zone
- OECD Development Centre – the Rand Zone
Шаблон:Economic integration Шаблон:Authority control
- ↑ Шаблон:Cite web
- ↑ Шаблон:Cite web
- ↑ Шаблон:Cite web
- ↑ Шаблон:Cite web
- ↑ Шаблон:Cite web
- ↑ Шаблон:Cite web
- ↑ Шаблон:Cite news
- ↑ Шаблон:Cite web
- ↑ Шаблон:Cite journal
- ↑ Anguilla and Montserrat are members of OECS currency union, but not of the CSME.
- ↑ To all intents and purposes a monetary union. They are the last two nations whose dollars have remained at par and mutually interchangeable since the days when the Spanish Dollar was the united currency of large areas of the New World and Southeast Asia.
- ↑ alongside the ngultrum
- ↑ Not official, but freely used as a tender in Nepal, due to primarily the economic flux with India and also the instability caused by that country's civil war.
- ↑ Шаблон:Cite news
- ↑ Шаблон:Cite book
- ↑ Шаблон:Cite web
- ↑ Шаблон:Cite news
- ↑ EU Overseas countries and some other territories participate partially in the EU single market per part four of the Treaty Establishing the European Community Шаблон:Webarchive; Some EU Outermost regions and other territories use the Euro of the currency union, others are part of the customs union; some participate in both unions and some in neither.
Territories of the United States, Australian External Territories and Realm of New Zealand territories share the currency and mostly also the market of their respective mainland state, but are generally not part of its customs territory. - ↑ Шаблон:Cite web
- ↑ Шаблон:Cite journal
- ↑ Шаблон:Cite web
- ↑ Шаблон:Cite news
- ↑ 23,0 23,1 Шаблон:Cite web
- ↑ Not currently on any political agenda, based mostly off conspiracy theories.
