European Money Research Articles

Management of European funds. Case study: Neamț and Constanța counties, Romania

The present research aims to investigate and evaluate the effectiveness and efficiency of the management of European funds in two distinct counties of Romania: Neamț County and Constanța County. European funds represent a significant resource for the economic, social and infrastructural development of the country, and the way in which they are administered and used has a significant impact on regional progress. Our comparative analysis focuses on identifying the significant differences between the two counties regarding the attraction, management and use of European money. The obtained results reveal significant differences in the approach and performance of European funds management between the two counties, highlighting the key factors that influence this process. Our research not only contributes to the understanding of how European funds are managed at the regional level in Romania, but also provides practical recommendations for improving the management of these resources in both counties. The positive impact of European funds on agricultural businesses in the two counties is obvious, contributing to the improvement and modernization of the agricultural sector.

ANALYSIS AND IMPACT OF APIA ACTIVITY ON DEVELOPMENT AND SUPPORT OF AGRICULTURAL SECTOR IN ROMANIA

Agriculture is a very important sector for Romania, providing food and products of vegetable and animal origin, jobs for people in villages and business opportunities for enterprises and investors. Romania's agricultural area is in permanent change, influenced by European money that was attracted through support measures and community policies, and environmental protection and the need to ensure a sustainable development of agriculture in Romania made the activity of the Agency for Payments and Intervention for Agriculture (APIA) stands out as an important factor in aligning modern agriculture with the environment. Through this study, we aim to analyze the way in which APIA promotes sustainable agricultural practices and provides support to farmers to protect the environment and whether the agency's activity has brought benefits to the economic development of Romania and Neamț County. We thus demonstrate the important role that the agency has for the economy, for supporting farmers and agricultural producers in Romania, but also for the country's agricultural policy, the institution participating in the development and implementation of national agricultural policies and strategies, as well as in the process of negotiating subsidies and projects within the European Union (EU) agricultural financing system.

Spectres of European money and Stefan Eich’s Currency of Politics

AbstractThis paper aims at discussing the historical trajectory of European money and the way it can be illuminated through a dialogue with Stefan Eich’s The Currency of Politics. Fleshing out the different theories, visions, and conceptualisations of money in Eich’s book, this paper utilises this exposition to evaluate the development and operationalisation of European money. With an eye to contemporary debates about the re-politicisation or democratisation of money, the paper will critically assess the way in which Eich’s account can be used as a framework to explain European money.

Ukrainian chronicles, diaries-chronicles of the 17th–18th centuries about the economy and money circulation of the Cossack Hetmanate

In the article the authors consider Cossack chronicles and diaries of the 17th–18th centuries. from the point of view of covering the issue of economy and money circulation of the Cossack Hetmanate. The source value of each of them is not the same, but they are united by a common idea such as the formation and strengthening of the Cossack Hetmanate of Ukraine, the establishment of economic independence and the struggle of the Ukrainian Hetmans to preserve their autonomy in the conditions of the “Ruin” and the attack on the rights of the Hetmanateby the Russian tsars in XVIII century. It has been investigated that during the reign of the Polish king Sigismund III (1587–1632), the expansion of trade relations led to the spread of gold and coarse silver coins (ducats and thalers) in Ukrainian lands from the countries of Western Europe. Permanent wars waged in the 17th century between Polish–Lithuanian Commonwealth and Turkey exhausted the Polish and Ukrainian economies, the prices of grain and other food products rose, and the value of the thaler and ducat gradually increased. Describing the period of the Russian orders spreading in the Hetmanate under Hetman Ivan Briukhovetskyi (1663–1668), HryhoriyHrabianka clarifies the newly introduced monetary and in-kind taxes introduced in the 60s of the 17th century. There are facts about the use of gold coins in the currency of the Hetmanship and their rate against the Russian ruble and Western European money in the Cossack annals. Another stable unit on the money market was the gold ducat, which was called “red gold” in Ukraine during the period. Chronicles of the beginning of the 18th century are increasingly called Russian small (denga and kopeck) and heavy silver coins and rubles which were introduced into monetary circulation by Peter I. But as M. Kotlyar testifies, were found and investigated 67 Ukrainian finds of this period which contained not only Russian coins but also Western European coins, mainly of the 17th century. Thus, we can make sure that S. Velychko exaggerated the rate of displacement of Western European coins by Russian from the Ukrainian market after the Battle of Poltava in 1709. The monetary figure of the Left Bank of the first third of the 18th century, as evidenced by the above-mentioned diaries, is rather complex: they counted both in the Lithuanian and Polish ways. Copies, gold coins, thalers and Russian kopecks and rubles were used as units of account. This reflected the state of the money market at the time, in which foreign coins and numerals were more common than Russian ones. In the written sources of Left Bank Ukraine, the largest number of references to the сzechs (one-and-a-half pennies) refers to the first quarter of the 18th century. This coincides with evidence of numismatic material regarding the greatest spread of сzechs in the circulation of the Left Bank of the mentioned period. However, in the next two or three decades сzechs remained one of the popular coins of the Ukrainian market.

European money in the Romanian village. Case study

The money from European funds opened new horizons for the inhabitants of Romanian villages. They began to look at the future with other eyes, got acquainted with modern technologies and made their work easier. The communal roads were paved, the houses became more beautiful, the living conditions of the villagers improved with the help of modern utilities – sewerage, natural gas, almost all agricultural plots are worked, the number of social workers decreased. The internet and the media have brought new information, many of which are useful and open to ideas. The number of advantages of accessing European funds far exceeds the number of disadvantages, including in Romanian village.

Monetary Policy and Commercial Lending Rates Nexus: Evidence from Czechia

The paper investigates the interest rate pass-through in Czechia during different monetary policy stances from April 2005 to February 2020 using structural vector auto-regressive models. The effects of changes in the European money market rate on the Czech money market rate are also observed. We estimate how the changes in monetary policy setting are transmitted to commercial lending rates for both corporate and households. The results show that the responsiveness of Czech money market rate to shocks in the Euro Area money market rate is no longer true. The pass-through from the official policy rate to the money market rate was confirmed; however, the reaction varied during different monetary policy stances. After the zero lower bound period, shocks in money market rate were found to be more important for rates on corporate loans up to 30 mil CZK. The shocks in confidence significantly contributed to the variance in changes of rates on corporate loans up to 30 mil CZK and rates on consumer loans when the monetary policy tightened after the zero lower bound period.

The consolidation of TARGET2 and TARGET2-Securities: How is the Eurosystem exploring synergies across its infrastructures, and how will this impact day-to-day operations?

Financial market infrastructures play an important role in financial integration in Europe. From the very start of the monetary union, the Eurosystem has provided and enhanced financial market infrastructures to facilitate integrated money markets and capital markets. Whereas TARGET enabled a European money market, TARGET2 has improved this by channelling all high-value payments through a single platform, allowing a single liquidity management. With TARGET2-Securities, which was launched eight years after TARGET2, several of the Giovannini barriers to harmonised post-trade business were removed. In the next stage, TARGET2 and TARGET2-Securities will be consolidated on a single platform to make a further improvement in overall liquidity management and bring about a further reduction in settlement costs by converging to harmonised technical features and using common components. These two TARGET services will be augmented by TARGET instant payment settlement (TIPS) as a new TARGET service. The renewed and complemented TARGET services are scheduled to go live in November 2021. One year later the Eurosystem will be providing the Eurosystem collateral management system (ECMS) — a single system for the management of all eligible collateral for monetary policy operations. The current 19 different local systems used for that purpose will be replaced. After that, the whole lifecycle of central bank money will be covered by integrated financial market infrastructure services: In TARGET2 and TIPS, central bank money is used for payments such as those for the settlement of securities in TARGET2-Securities. And these securities could be easily mobilised to become collateral to be used by the means of ECMS in order to receive central bank money. This paper analyses how the consolidation of TARGET2 and TARGET2-Securities, as well as the complementation by TIPS and the ECMS will contribute to the integration of European financial markets, improving the efficiency and safety of FMIs. It also looks into what is required in order to achieve the full benefits.

Last-minute deal grants European money to U.K.-based fusion reactor

Last-minute deal grants European money to U.K.-based fusion reactor

Byzantine coins and their "Bulgarian" and "Latin" imitations in Volyn in the context of problems of money circulation in Eastern Europe (based on the materials of the Luboml Regional Museum)

An article about Byzantine origin coins in the medieval circulation of Volyn, which represented Eastern European money as imitations of Bulgarian and Latin XII - first half of XIV century. They refer to the non-monetary period in the history of national numismatics. The research was conducted on the basis of the collection of the Luboml Regional Museum.

Stateless Money and State Power: Europe as ordoliberal Ordnungsgefüge

Since the start of the Euro crisis there has been an abundance of literature that identifies an ordoliberal Europe with the politics of austerity. This literature is confronted by the paradox that the Euro is a stateless currency. Ordoliberalism holds that economic orders are politically constituted and sustained. The article contends that the exploration of ordoliberal principles of economic constitution and Ordnungspolitik uncovers the crucial role of the member states in monetary union. What monetary union integrates is the role of the state in establishing and sustaining a framework for the domestic conduct of economic activity. In detail, in monetary union the democratically constituted member states assume the role of federated executive states of European money, which governs the decentralised relations of competitive adjustment in territorialised labour markets. The European economic order depends on the commitment and capacity of the member states to make it work within their jurisdictions.

A European Money Laundering Curiosity: Self-Laundering in Finland

Third-party money laundering has been comprehensively criminalised in the European Union member states. In contrast, many states have traditionally had a more negative attitude towards the punishability of self-laundering. Then again, under international pressure, member states have agreed to also criminalise self-laundering either completely or partly in recent years. Finland has also struggled with the criminalisation of self-laundering. So far, the main rule in Finland is the non-punishability of self-laundering. However, according to the valid exceptional rule, self-laundering can be punished if the money laundering offence, with consideration to the continuous and planned nature of the acts forms the most essential and blameworthy part of the totality of offences (Finnish Penal Code, Chapter 32, Section 11). This article critically examines the unique legislative solution of Finland and demonstrates that the punishability of self-laundering has remained a dead letter. Relying on international comparative material and supranational criminal policy, the article also suggests that the Finnish legislator should consider more comprehensive criminalisation of self-laundering.

Przestępstwo prania brudnych pieniędzy w ujęciu komparatystycznym. Rozważania porównawczoprawne na tle porządków prawnych wybranych państw europejskich, azjatyckich oraz kontynentu amerykańskiego

The purpose of this paper is to expound the reasons for systematic growth of the money laundering crime, as well as its variations and chosen aspects of the attempt stadial form. Regardless of legal culture perspective, the complex of features required as an element of analyzed offence is, as a rule, comparable or at least similar. Hitherto a numerous of normative regulations at national and supranational level has been presented and implemented. Thoughtful, consistent and intransigent legal strategy of anti-money laundering in different countries (e.g. in the Republic of India or in the People’s Republic of Bangladesh) resulted in a noticeable reduction of the scope of the described practice. Of all the twelve analyzed countries, in the author’s assessment, the best anti-money laundering legal solutions characterized the Kingdom of Norway. Partially, beyond the outstanding substantive law, this favorable position was achieved thanks to mixed character of Norway’s legal culture. In addition, the complex of features of analyzed offence is not too narrow or too wide. In the Norwegian penal code there is no question of superfluous casuistry. On the other side, author contrasted anti-money laundering legislation of the Russian Federation and of the Ukraine. The Russian and Ukrainian legislation in subject of criminal law is erratic, the complex of features required as an element of analyzed offence is too wide and what more, a numerous groups of entities are excluded from the action of specified provisions of positive law. Thus, the Russian Federation is gradually becoming a central entity of European money laundering issue.

The European platform for financial education as incentive for the national efforts in implementing financial literacy programs: The case of the Association of Serbian Banks

A sustainable financial system relies on two pillars: the functional and healthy financial institutions, as well as the financially competent customers-investors-entrepreneurs. The responsibility for the implementation of training programs and preparation for the well-informed choice does not lie only with the natural persons and legal entities. This is a shared responsibility of different stakeholders: individuals, families, small and medium enterprises, public administration, the Ministry of Education, the financial services sector, employers and representatives of trade unions and consumer protection organizations as well as other civil society initiatives. A prime example of such an integrated approach towards the same goal is the European Platform for Financial Education, an initiative launched by the European Banking Federation, the European Banking Training Network and other institutions (professional associations), in February 2017 in Brussels as an incentive for the national level efforts in implementing the respective financial literacy programs. In this paper we analyzed the importance and role of the European Platform for Financial Education in the case of the Serbian banking sector through the activities of the Association of Serbian Banks. These activities will be implemented by the Association of Banks of Serbia continuously throughout the year, and after the celebration of the European Money Week on 27-31 March 2017.

European Money in Greece: In Search of the Real Impact of EU Structural Funds

AbstractThe impact of EU (European Union) Structural Funds (from the European Regional Development Fund, the European Social Fund, the Cohesion Fund, etc.) channelled to Greece and other countries over the last 35 years has been thoroughly evaluated by EU‐commissioned impact reports and relevant academic studies. However, several political consequences of development transfers have been largely neglected. Concepts, methods and conclusions reached by studies of North–South development aid can help greatly to understand the medium‐ and long‐term political impact of EU funds. This article is based on interviews with EU and Greek politicians, officials, beneficiaries and various stakeholders. The conclusion is a less positive – but familiar in other parts of the world – story.

The SDR Interest Rate Basket--Proposed Change of the Representative Interest Rate for the Euro and Amendment to Rule T-1(C)

The three-month Eurepo interest rate, the euro component of the SDR interest rate basket, will be discontinued as of the end of 2014. The three-month Eurepo rate, administered by the European Money Market Institute (EMMI), has been the representative interest rate instrument of the euro area in the SDR interest rate basket since 2006. However, faced with a significant shrinking in the number of banks participating in the rate-setting panel, the EMMI announced last month that the Eurepo interest rate will be discontinued after December 31, 2014. This paper proposes to replace the three-month Eurepo rate in the SDR interest rate basket with a transactions-based three-month interest rate. Staff has consulted with the European Central Bank (ECB), which recommends to replace the Eurepo rate with a three-month spot rate derived from the secondary market yield curve covering euro area government bonds rated either investment grade or AA and above. In staff’s view, the latter option (AA and above) would be most comparable to the other instruments in the SDR interest rate basket and would have characteristics that are most consistent with previous Board guidance for selection of financial instruments in the SDR basket. The proposed change would be implemented by an amendment to Rule T-1(c), requiring a 70 percent majority of the total voting power.

Strains on Money Market Makers and Money Market Tensions

We analyze the trading book of a key market maker in the European unsecured money market and study the extent to which liquidity risks accumulated by this market maker affect his pricing of liquidity and the bid-ask-spread he quotes on unsecured borrowing and lending. We find that the larger the funding liquidity risk assumed by the market maker the higher the market price for liquidity and the higher his term premium. Furthermore, his bid-ask-spread and the sensitivity of his bid-ask-spread to the maturity of transactions increases as his assumed liquidity risk rises. This suggests that also in the unsecured money market funding constraints and funding risks of the market maker affect market liquidity in line with Gromp and Vayanos (2004) and Brunnermeier and Pedersen (2009).

Coining societies: an inter-functional comparative analysis of the Euro

The present analysis of the Euro looks for the marks that function systems make on what we commonly take for the European money. Clearly distinguishing between coins and currency, the Euro coins and banknotes are not taken for economic tokens per se but for storage devices that contain both economic and noneconomic information. A systemic analysis of the function system references on these storage devices shows that the economy has left fewer marks on the Euro than politics, art, and the mass media systems have. We, hence, argue that “the Euro” “is” not just money with a political second mission but rather can be understood as an indicator of the relative relevance that specific function systems do or do not have for the European societies and the European society.

EU proposal for regulation on money market funds

On 4 September 2013 the European Commission released a proposal that seeks to restructure the entire European money market fund (MMF) industry. This article outlines the premises of the proposal and discusses concerns related to the most controversial provisions. We believe that economically unfeasible requirements for constant net asset value (CNAV) MMFs will result in the exit of these funds. We believe that the primary objective of financial market stability cannot be achieved by eliminating CNAV MMFs in favour of variable net asset value (VNAV) MMFs. There is simply no evidence that VNAV MMFs are immune to runs. New systemic risk will emerge as a result. Other types of investment products will proliferate, including private liquidity funds, which the existing EU regulation is not addressing. The focus of the proposal is misplaced. Runs in a single fund, whether CNAV or VNAV, due to a credit event should not be the primary regulatory concern. Investing is always a risky business and regulation ought to empower investors with complete information to adequately manage these risks. We recognise that any regulatory rules will be imperfect. The never-ending search for the most efficient allocation of resources will drive investors away should the post-reform MMF structure prove too costly. The solution can be found in the balance between long-term funding needs of the real economy and the utility of these funds.

The information content of Eonia swap rates before and during the financial crisis

Before August 2007, implied forward rates in the overnight interest swap rates closely reflected market expectations about the future path of the Eonia, and therefore, about the future course of the ECB’s monetary policy stance. Nevertheless, this link was weakened considerably during the most acute episode of the financial crisis. Using the expectations hypothesis of the term structure as a benchmark model for the determination of the overnight interest swap rates, we find that after May 2010 the monetary transmission mechanism was partially restored when the ECB implemented various ‘unconventional measures’ in response to the financial crisis. On the contrary, liquidity and credit risks are still present in unsecured deposit markets, distorting the pricing and transmission of the ECB monetary policy stance along the Euribor rates. These results should be of interest for regulators, financial institutions, and researchers in European money markets.

Does the euro dominate Central and Eastern European money markets?

The so-called German Dominance Hypothesis (GDH) claimed that Bundesbank policies were transmitted into other European Monetary System (EMS) interest rates during the pre-euro era. We reformulate this hypothesis for the Central and Eastern European (CEE) countries that are on the verge of accessing the eurozone. We test this “Euro Dominance Hypothesis (EDH)” in a novel way using a global vector autoregressive (GVAR) approach that combines country-specific error correction models in a global system. We find that euro area monetary policies are transmitted into CEE money market rates, providing evidence for monetary integration between the eurozone and CEE countries. Our framework also allows for introducing global monetary shocks to provide at least tentative empirical evidence regarding the effects of the recent financial crisis on monetary integration in Europe.