THE EURO OR THE EUROPEAN MONETARY UNIT

Preview of Main Ideas

This activity is designed to have students briefly learn about the European Union (EU), the countries involved, and some of the components of the EU agreement. The main focus of this lesson is to familiarize the student to the Euro, the new economic and monetary unit in the EU. The student will better understand the impact the euro will have on Western Europe.

Connection with the Curriculum

This lesson could be used in a geography, social studies, or math class.

Teaching Level: Grades 5-8.

Objectives Classification Outline

Objective #1: The student will analyze the benefits that one large European Union has over smaller individual countries.

Essential Element: Human Systems.

Standard #13: How the forces of cooperation and conflict among people influence the division and control of earth’s surface.

Knowledge Statement #2: How cooperation and conflict among people contribute to political divisions of Earth’s surface.

Skill Set #5: Answer geographic questions.

Skill #1: Develop and present combinations of geographic information to answer geographic questions.

Skill #2: Make generalizations and assess their validity.

Theme: Regions and Movement.

Objective #2: The student will be able to evaluate the importance of the Euro Monetary Unit and understand some of the benefits and drawbacks of the new currency.

Essential Element: Human Systems.

Standard #13: How the forces of cooperation and conflict among people influence the division and control of earth’s surface.

Knowledge Statement #3: How cooperation and conflict among people contribute to economic and social divisions of Earth’s surface.

Skill Set #5: Answer Geographic Questions.

Skill #1: Develop and present combinations of geographic information to answer geographic questions.

Skill #2: Make generalizations and assess their validity.

Theme: Regions and Movement.

1. A classroom Atlas.
2. A copy of the Euro or Emu (Economic Monetary Union) fact sheet (provided).
3. A copy of the Euro currency (provided).
4. An outline map of Western Europe (provided).

DAY 1:

1. Have the students look at a map of Western Europe and brain storm on the differences between counties. (ie. Languages, customs, religions, politics, currency, postage, national holidays, values, etc.)

2. Using an atlas have students measure the distance between northern Sweden and southern Italy (European Union countries at its longest distance), and between western Portugal and eastern Greece (EU at its widest). Compare this to the size of the United States by measuring from Maine to Florida, and Maine to Washington state. Remind students that this comparison is not taking into consideration Alaska and Hawaii. Students will soon see that the U.S. is larger. Western Europe is a little less than 2/3 the size of the U.S.
3. Tell the students to imagine traveling from Chicago to New York City and having the language and the currency change every time you went through a different state. (Many of the countries in Western Europe are no larger than U.S. states.) Have students comment on what problems might result.
4. Remind students that any time you exchange foreign money there is a commission charge assigned by banks or currency exchanges. Give a specific example of changing dollars to another currency. Example: Changing 100 U.S. dollars to Canadian dollars. The exchange rate is 1.54 Canadian dollars to every U.S. dollar, or 0.649 U.S. dollars for every Canadian dollar. The commission charge is $4.00 Canadian. How many Canadian dollars would you get, subtracting the commission charge?

1.54 * 100 = 154 – 4 = $150.

How much in U.S. dollars was the commission charge?

0.649 * 4 - $2.60 U.S.

Do other examples using different European countries. The Sunday travel section of a major newspaper carries the latest currency exchange rates.

DAY 2:

1. Tell students that after centuries of competition and frequent wars, the nations of Western Europe are now coming together in a spirit of unity and cooperation and have formed the European Union (EU). While students look at a map of Western Europe, identify the 15 European Union countries. EU = Germany, France, Italy, and the United Kingdom – the 4 giants; Belgium, the Netherlands, Luxembourg, Denmark, and Austria – 5 neighbors of Germany; Ireland, Sweden, Finland, Greece, Spain, and Portugal – the 6 outer countries.

2. Discuss some of the goals of the European Union (see Euro or EMU sheet provided). Students may also read about the European Union from their text books, or you may supply them with an article on the European Union.
3. Call on students to draw contrasts and parallels between the EU and the U.S. The EU produces and trades more goods than the U.S.; trade barriers across national boundaries are disappearing, like U.S. interstate barriers; common currency plan, like the U.S. dollar used by all states.
4. Tell students that a common currency called the "Euro" was introduced during 1999. Eleven of the fifteen EU countries agreed on the terms of the Euro. Germany, France, Spain, Italy, Ireland, the Netherlands, Austria, Belgium, Finland, Portugal, and Luxembourg, traded their national money for the Euro. They sacrificed a fundamental element of sovereignty – the right to issue their own money. Instead, a European central bank runs the European monetary union. Members also surrendered two of their most powerful economic safeguards: (1) the right to devaluate out of trouble; (2) and the right to run budget deficits to counter mass unemployment. The only way out of the monetary unit is to quit!
5. Talk about the timetable for the Euro (see Euro or EMU sheet #3, #4 and #5). Ask students to comment as to why they think all the stages of the implementation of the Euro were not scheduled for one specific date.
6. Have the students examine a copy of the Euro currency (see provided copy). Explain that the designs for the Euros were created by school children and that only Latin and Greek words will be used to not show favoritism of countries. Ask if they had a decision in designing a new dollar in the U.S. what would they want to include?
7. Have the students comment on why they believe not all EU countries agreed to adopt the Euro. Four have not – Great Britain, Denmark, Sweden and Greece. Discuss why not all Europeans supported the change to Euros (see Emu sheet #9)

DAY 3:

1. Pass out a copy of the EMU or Euro sheet and have students read and comment on any of the statements.

2. Pass out and assign the Euro Worksheet.

1. Students can write letters to foreign students in EU countries asking for their attitude on the euro.
2. Have students research the construction of the "Chunnel", another cooperative venture by two EU countries. The tunnel beneath the waters of the English Channel linking England and France impacted a variety of attitudes from both the British and French.
3. Have students gather information on other agreements of the European Union and report them to the class.
4. Have students design a new U.S. dollar.
5. Have students write about the challenges a greater economic union among the countries of European Union pose to the United States.

1. Quiz students on the facts they learned about the euro from the lesson.
2. Grade the Euro Worksheet.
3. Have students write a paper about the benefits and drawbacks of the euro.

Exploring Your World: The Adventure of Geography. Washington D.C.: National Geographic Society, 1993.

"The Euro Special Report." Business Week, April 27, 1998, Several articles.

"The European Community". Prentice Hall World Geography: A Global Perspective, New Jersey: Prentice Hall, 1995, p. 312-313.

"Getting Ready for Europe’s New Money". Maclean’s, May 11, 1998, p. 33.

"Kicking and Screaming into 1999". The Economist, June 7, 1997, pp. 19-22.

Peterson, Thane. "EMU: No More Ifs or Maybes". Business Week, October 27, 1997, p. 66.

EURO or ECONOMIC MONETARY UNION (EMU)

1.  The European Union or Community was established to create a mutually beneficial union for its members. The uniting of several small counties have created a single powerful market able to compete economically with the United States, Japan and other counties. Three components of the European Community include; a) the removal of trade barriers to its members; b) the right to live anywhere in the community and vote in local and European elections; and c) the establishment of a single currency¹.

2.  The common currency (called the "EURO") was introduced during 1999. On May 2, 1998, 11 countries of the European Community – Germany, France, Spain, Italy, Ireland, the Netherlands, Austria, Belgium, Finland, Portugal, and Luxembourg – set the terms for trade in their national money for the euro.

3.  The currency system officially started on January 1, 1999, when corporate books, bank transfers, credit card payments and even mortgages began to be figured in euros.

4.  Euro coins and notes replaced national currencies on January 1, 2002.

5.  National currencies of the "Euro Countries" ceased to exist on July 1, 2002. They were replaced by the newly designed euros. The design of the euros was created by school children, and does not show favoritism to any country by using only Latin and Greek words. See the enclosed euro example sheet.

6.  A major benefit of using a common currency includes less confusion on the actual worth of money. The same currency  highlighted pricing disparities. It is easier for Europeans from Lisbon to Copenhagen to compare prices on everything from pencils to automobiles, because they are quoted in the same money.

7.  People and companies save on foreign currency exchange. The euro wiped out some $65 billion annually in currency exchange costs and cut the middleman out of trillions of dollars worth of transactions². Western Europe is slightly less than two-thirds the size of the United States. No place in Europe is very far from anyplace else on the continent. Consider traveling from Lisbon, Portugal to Copenhagen, Denmark, a distance of about 1400 miles. Within that distance a person would have traversed over seven different countries with seven different currencies. The foreign currency exchange can get quite expensive. The euro has simplified this situation.

8.  The euro was expected to give Europe a much stronger economy.  More European companies are able to compete globally with high productivity, low inflation, and steady growth. The euro campaign initiated more growth than Europe had seen in nearly a decade³.

9.  Not all Europeans were sold on the euro. In a recent German poll 32% of the people felt the monetary union should be postponed, and 33% believed the euros should not have been introduced⁴. So far, all they saw were layoffs and social-spending cuts. They didn’t buy the notion that EMU would boost growth and create jobs. Some Europeans were being dragged into monetary union against their will. They saw a single currency as an assault on values they held dear, the shared sense of community and centuries of tradition. For many, monetary union was an affront to their way of life. They thought the euro would increase political animosity and division. Creating a new currency would be a risk under any circumstance. It was an enormous risk when the new currency was introduced against the will of the people who were going to use it.

Footnotes

¹"The European Community," Prentice Hall World Geography: A global Perspective (Englewood Cliffs, New Jersey: Prentice Hall, 1995) p. 313.

²"Finance," Business Week, April 27, 1998, p. 96.

³"The Euro Special Report," Business Week, April 27, 1998, p. 101.

⁴Joan Warner, "Mix us Culturally? It’s Impossible," Business Week, April 27, 1998, p. 108.

Name ____________________________________________________________

Date _____________________________________________________________

Period ____________________________________________________________

EURO WORKSHEET

1. What is the euro?
2. What does EMU stand for?

Match the European Union country with its main languages, largest city, and today’s currency.