The International Path of the Euro: An Analysis on the Maintenance of the International Position of the Euro as a Reserve Currency after the Eurozone Debt Crisis

Within three years since its introduction in 1999, the euro has developed into the second most important global reserve currency. This thesis is aimed at explaining mechanisms that contributed to the euro’s international position. The international role of the euro before and after the eurozone debt crisis will be compared, in order to explain why the euro maintained its position subsequent to this crisis. In addition, this thesis will highlight the importance of the Economic and Monetary Union due to its relation to the development of the international role of the euro. A stronger international role can be achieved by strengthening the Economic and Monetary Union, and in turn a more enhanced monetary union acts as a shield against possible financial crises. By using the new institutionalist theory of historical institutionalism along with the method of process-tracing, it is anticipated to determine critical events and to develop a process of causal mechanisms that can explain why...Show moreWithin three years since its introduction in 1999, the euro has developed into the second most important global reserve currency. This thesis is aimed at explaining mechanisms that contributed to the euro’s international position. The international role of the euro before and after the eurozone debt crisis will be compared, in order to explain why the euro maintained its position subsequent to this crisis. In addition, this thesis will highlight the importance of the Economic and Monetary Union due to its relation to the development of the international role of the euro. A stronger international role can be achieved by strengthening the Economic and Monetary Union, and in turn a more enhanced monetary union acts as a shield against possible financial crises. By using the new institutionalist theory of historical institutionalism along with the method of process-tracing, it is anticipated to determine critical events and to develop a process of causal mechanisms that can explain why the euro happened to maintain its international position after enduring one of the most critical economic and financial setbacks in the history of the eurozone.Show less

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The International Path of the Euro: An Analysis on the Maintenance of the International Position of the Euro as a Reserve Currency after the Eurozone Debt Crisis