Reasons for Adopting the Euro

Reasons for Adopting the Euro

There are many reasons why Britain may want to join the Euro but there

are just as many reasons against this proposition. It is up to the

government and the people to decide on whether or not to accept this.

One of the reasons why Britain should join the Euro is that it will

provide more competition between organisations. This will push up the

quality of the products and services and will also increase the

efficiency of the organisations. Competition always boosts the economy

and since the Euro will unite the European countries further, a bigger

market will be opened up to the different businesses.

Another reason is that it will help poorer countries develop. If their

currency is united with the rest of Europe, they can be supported by

it. The interest rates set by Brussels will help small, weak economies

develop and in times of economic crisis the Euro will support it as

all the 'big' countries are with it. This gives an incentive for the

larger countries to help the smaller ones.

This will probably increase the sense of brotherhood between European

countries. This has many benefits such as greater tolerance and even

more free trade. A sense of unity is always important as it makes it

easier for the countries to communicate and work together.

There will also be greater specialisation and businesses will enjoy

greater economies of scale. The theory of comparative advantage says

that as different countries realise their strengths and weaknesses,

specialisation in an area such as Europe will occur. The Euro makes

this easier, providing a measure in which the countries can measure

their comparative advantage without the exchange rates.

Once the induction of the Euro goes through, nobody will need to keep

reserves to support the currency against different currencies in

Europe because they will all be one.

Once all there is one currency, the pricing by the companies will be

easier to see through and will help the consumer. Many times, the

companies manage to trick consumers with changing exchange rates but