In 1945 WWII ends and six countries; Belgium, France, the Netherlands, Italy, Germany, and Luxembourg, got together to set up a union between neighbours with the intent of lessening the potential for future war. The aim is to unite sovereign neighbours under a European flag which would lead to greater economic and political order.
In 1957 the EEC or European Economic Community is founded by the Treaty of Rome. The EEC becomes the "common market".
In the 1960's the founding countries of the EU trade against each other without charging custom fees. The food and agriculture sector of the young EU is merged and food production goes into a surplus even after the collective population is fed.
In 1973 the EU membership is increased to nine countries after the UK, Ireland, and Denmark sign on. In 1981 Greece is included in the EU as the tenth member. In 1986 Spain and Portugal join and within a year the Single European Act is signed which pursues rules of a "single market" with the free flow of trade across EU borders.
The four freedoms of a single EU market are promoted as the freedom to move people, money, goods, and services across EU borders.
In 1995 Austria, Finland, and Sweden join the EU and the collective Europa now numbers 15 countries.
More treaties are signed including the 1993 Maastricht Treaty, the 1999 Treaty of Amsterdam.
In January of 1999 the Euro is introduced as the new currency of the land or Europa or as it is better known the EU or European Union.
Meanwhile the EU membership numbers as kept rising and 27 countries belong to the unconstitutionalized land of Europa.
The Euro currency is legal tender in many countries but not all EU countries have implemented the new legal tender of the EU as their official currency of trade. For example the UK continues to trade the Great Britain pound. Meanwhile Montenegro, the Vatican City, and other countries trade in Euro but do do not fully belong to the Eurozone.
Eurozone trade or trade conducted by those countries who have changed to the Euro is regulated by the EMU or Economic and Monetary Union. The Euro is monetary policy is set by the European Central Bank.
In 1999 the Euro started trading at about 111 USD but by 2001 the Euro had lost nearly 30 percent of it's value. The New York Tower issue of 2001 sends investors panicking and looking to the Euro as a safe haven. For several months the momentum behind the Euro continues and the EurUsd currency ends up trading in a range between 118 and 130 for months. This is less than 10 percent above the price where the Euro started trading in 1999. It bounced to 137 around the time of Katrina in Louisiana and then lost value to the 118 level until 2006 when the Euro took off for a new high which settled in 2008 at about 160 EURUSD.
From that high the Euro lost all of the gains and returned to settle at the mid 118 - 137 level before the US bank fiasco in America. This initialized a new wave towards the Euro which did not surpass the 160 level. Somehow the money markets or the people who move financial instruments around were not ready to promote the Euro as the reserve currency of the world any longer. Ireland banks were defaulting and Greece was near backruptcy so the story goes and the Euro took a dive starting in January of 2010. The Euro knife looks like it might find support at 118 to 116 but any news out of Euro of defaults or even rumours of war amongst neighbours could have the Euro tumble to par or even lower within a few months.
Some financiers and financial advisors talk of the Eurozone going the way of the DoDo bird.
That seems like pure bogus. The Euro and the Eurozone will remain players in the global foreign exchange markets for years to come we say. What is happening today is part of a bigger program where par EURUSD is only one act.
What is interesting here is that once the EURUSD settles and bounces, and it will, then it will also take the EURGBP upwards towards par.
Another act in the plot is a par EURGBP.
One world currency is on it's way and the Geography of the Euro is just an act in the program.
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