Pros and Cons of the Euro :: Finances Money European Currency Essays

Pros and Cons of the Euro The United Kingdom will not kernel the whizz European property with the first wave of countries on 1 January 1999. The Chancellor of the Exchequer, Gordon Brown, said in October that, although the government supported the principle of the single coin, Britain would not be ready to join at least until the morsel wave of countries join in 2002. He added that the UK should, however, begin to prepare for financial union. There are many possible advantages and disadvantages that the government had to consider Advantages 1. A single specie should closure currency instability in the alive(p) countries (by irrevocably fixing exchange rates) and reduce it outside them. Because the Euro would have the compound credibility of being used in a large currency zone, it would be more stable against speculation than individual currencies are now. An end to internal currency instability and a reduction of external currency instability would enable exporters to project future markets with greater certainty. This will release a greater potential for growth. 2. Consumers would not have to change bullion when travelling and would encounter less red tape when transferring large sums of coin across borders. It was estimated that a traveller visiting all twelve appendage states of the (then) EC would lose 40% of the value of his money in dealing charges alone. Once in a lifetime a family might pull ahead one large purchase or transaction across a European border such as buying a spend home or a piece of furniture. A single currency would help that transaction pass smoothly. 3. Likewise, businesses would no longer have to cave in hedging costs which they do today in order to picture themselves against the threat of currency fluctuations. Businesses, involved in commercial transactions in different member states, would no longer have to face administrative costs of accounting for the changes of currencies, plus the time involved. It is est imated that the currency cost of exports to trivial companies is 10 times the cost to the multi-nationals, who offset sales against purchases and can control condition the best rates. 4. A single currency should result in spurn interest rates as all European countries would be secure into German monetary credibility. The stability pact (the main points of which were agreed at the Dublin summit of European heads of state or government in December 1996) will force EU countries into a system of fiscal responsibility which will enhance the Euros international credibility.