An Evaluation of the Advantages and Disadvantages of Adopting the Euro. a Case Study of the Uk

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Title of essay: An evaluation of the advantages and disadvantages of adopting the Euro. A case study of The UK I. Introduction
An introduction of the new common currency in the Europe was announced on the first day of January 1999. At the first time, there were eleven countries, which decided to join the European Union (EU) and replace their own currency with a new one, the Euro. The Euro has been adopted as a official currency of the country members including Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxemburg, Netherlands, Portugal and Spain. In order to be accepted to join the Euro, these countries had to agree with the agreement about the price stability, long-term interest rate, government budget deficits, total
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During this phase Greece, after fulfilling convergence criteria, joined the EMU.

2. The advantages of joining the Euro

2.1 Exchange rate stability

Joining the Euro will reduce exchange rate volatility with the main EU trading partners. In order to maintain stable exchange rates between the Euro and the participating national currencies so as to avoid excessive exchange rate fluctuations on the internal market, The Europa (2007) shows he ERM II was set up on 1 January 1999. After agreeing a central exchange rate between the Euro and the country's currency, the ERM II allows the currency to fluctuate up to 15% above or below the central rate. Moreover, when necessary, the ECB and the central bank of the non-Euro area Member State can support the currency to keep the exchange rate in the safe ratio. In fact, the Euro is stronger compared to 10 years ago. According to Eurostat (2011), the exchange rate between the Euro and Pound increased from 1EUR = £0.621 in 2001 to 1EUR = £0.872 in 2011, or 1EUR = 0.896 USD in 2001 compared to 1.482USD in 2010.

If The United Kingdom joined the Euro, it would help to decrease the volatility of exchange rate with its the main European Union trading partners. By the use of single currency as a result of the enhancement of European single market, the single currency would decrease uncertainties and risks experienced by exporters and investors in their business dealings all over the zone. However, the pound is

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