Reasons for Adopting the Euro

Reasons for Adopting the Euro

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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

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once the Euro comes in, the company pricing will become more
transparent and consumers will get a better deal.

Everyone wants the Euro except Britain so they are a bit out of place.
Having a single currency without one of the major countries not a
participant will be a downside as the Euro will have to compete with
the pound and will not be as efficient.

The pound is so strong outside the Euro that it has probably caused
unemployment. Joining the Euro will probably bring unemployment down.
Businesses have lost a lot because of the fluctuations and the high
prices of the sterling. Their profit margin has sometimes been cut to
0 because of the fluctuations. Having a single currency will eliminate
this.

There are also some reasons why Britain should not join the Euro.
These will help us see whether it is really worth joining.

Joining the Euro will push up the price of food as the Common
Agricultural Policy will have an easier job with a single currency.
They will be able to set the food prices much, much easier without the
hassle of exchange rates.

There is also the sense of lost sovereignty. If the Euro is adopted,
the British people will dearly miss their pounds because they had a
strong, patriotic bond to the image of the Queen on the notes. The
pound has been there for so long, it is almost part of the British
culture and many Britons will be driven by pure emotion when they
choose not take up the Euro. Inducing the Euro will basically take
away a part of Britain's individuality and identity. Adopting the Euro
will hand control of the taxes to the EU and therefore England's
people will be financially governed by Brussels.

Denmark didn't join the Euro and therefore many of the people must
have been fundamentally against it. There must have been pretty strong
reasons to persuade the people of a whole country to vote against the
Euro. This argument could be countered by saying that many countries
did choose to join and therefore there must be some good reasons to
join the Euro. The vote in Denmark was close and there are many
differences between its economy and Britain's.

Joining the ERM from 1990 to 1992 was a disaster for Britain and it
took Britain a lot of money to restore the pound again. The pound was
left at an all time low and a fortune was pumped in to restore it to
its original value. There is no need to repeat that nightmare, should
the Euro be a big failure.

Once the Euro is introduced prices are going to increase. The giant
cost of the changeover will push up the prices to generate the funds
lost in the changeover.

Europe has never really done anything for Britain except impose
regulations and increase costs. Why should Britain suffer a loss and
help Europe?

In conclusion, I think that there are valid reasons on both sides of
the debate but it is just a matter of opinion as to which argument
affects you the most. It will be up to the people of Britain.



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