MBA (General)IV – Semester, International Business Unit 1
Definition of European Bank of Investment (EBI) and European Monetary Union (EMU)
The European Bank of Investment was created in 1958 by the Treaty of Rome with the major objective of balanced development of different regions of the European Union.
European Bank of Investment (EBI)
The European
Bank of Investment was created in 1958 by the Treaty of Rome with the major objective of balanced
development of different regions of the European Union. The text of
the Maastricht has further reinforced its role to serve the goal of economic
and social cohesion. This is the European banking institution to provide long-term
financing. It is an integral
part of the EU structure
and has its own organization of decision-making.
The Board of Governors
consisting of one minister of each member
state (generally the Finance Minister) gives general orientation and nominates other
members of the decision-making body.
The board of governors decides about lending, borrowing and interest rates on the proposal of the Managing Committee. This committee
is an executive organ of the EBI.
European Monetary Union (EMU)
The Heads of the
State and governments of the countries of the EU decided at Maastricht on 9th and
10th December 1991 to put in place the
European Monetary Union (EMU).
Adhering to the EMU means irrecoverable fixed exchange rates between different currencies of the Union. The setting up of
EMU has been a step towards the introduction
of a common currency in the member states of EU, as per the Maastricht
Treaty. It has ratified by all the 12 countries, which
constituted the Union at that point of time. The EMU completes the mechanism
that started with the Customs
Union of the Treaty of Rome and the big Common
Market of the Single Act.
