Arguments For and Against the UK Joining the European Single Currency

The beneficial effects on the economy may take as much as two years to be fully felt. I Further, the UK should be careful not to rely on a weak currency in order to support its competitiveness. An Exchange rates tend to fluctuate in value over time and the strongest economies are usually those with high productivity and low production costs, or those which produce highly innovative products. The long term performance of the UK economy could be adversely affected if a weakening of the currency was allowed to distract from these more fundamental determinants of economic performance. An Overall, however, in the current context, a weakening of Sterling is likely to be seen as beneficial for the UK economy, helping to support it through a difficult time and aiding a rebalancing of the economy towards the export sector. Despite this, it should be remembered that in other contexts, for example when controlling inflation is a more pressing problem, a fall in the exchange rate could be damaging.

These changes will in turn make companies more competitive, expand markets for businesses, as well as increase trade across borders. However, most importantly the euro is intended to create financial market stability within the participating countries. By eliminating the movements of exchange rate and all reference to them, the European Central Bank will control interest rates and inflation. This will lead to less uncertainty and create new opportunities for success.

The issue of whether or not the United Kingdom should remain a member of the European Union has been debated heavily over the past decade, with the debate heating up even more from the current European Sovereign Debt Crisis. Recent polls of the UK population showed that around half of the UK’s citizens would vote to pull out of the EU if it went to referendum. However, after all of the economic, political, and social advantages of being a member of the EU are considered, it remains clear that leaving the EU is not in the UK’s best interest. Economically, it does not make sense for the UK

The decision of the United Kingdom to leave the European Union has served in reshaping the way politics works in Europe. On June 3rd, 2016 a massive 30 million people came out to vote on the future of their countries. In the end, the vote to leave won 51.9% to 48.1%. Places like England and Wales both voted in favor of the exit, while Scotland and Northern Ireland voted overwhelmingly to stay in. While the long term effects of this decision obviously need time to be observed, the immediate economic impact has been somewhat mixed. The day after the vote was a cause for concern in that “the pound slumped after the referendum - and remains around 10% lower against the dollar and 15% down against the euro” (Wheeler 17). In contrast to this,

Throughout the history of European integration, the major UK parties have debated on all different aspects of Europe and the impacts of membership on Britain itself. From both these debates and party policies, it is clear to see that whilst there is generally a consensus over Europe, some issues have been a cause of disagreement among the major parties. In this essay I will analyse the policies and actions of the major UK parties that concern the EU and be able to conclude to what extent they agree over Europe.

The EU has its own currency called the euro which 19 of the 28 European states use. It is run by members of the European parliament, these members set rules that cover a wide range of areas such as rules on transport and business. Once a state becomes a member of the European Union they have a right to withdraw from the Union under the Treaty on the European Union. Article 50 in the Treaty on European Union states, “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements." If the United Kingdom votes to leave the Union, they would be the first state to ever withdraw their membership.

Since election to power Prime Minister, David Cameron, has embarked on a renegotiation mission in an attempt to improve public opinion of union membership. Mr Cameron has highlighted four key areas in which he is seeking reform. These areas are:

While the contributions of all member-states in the EU have been important and appreciated, the UK has brought a lot to the table that many other countries couldn’t. For example, the UK’s influence and the weight of just its name. For hundreds of years the UK has been powerful and if it had something to say, the world would listen. When the UK joined the EU it was a monumental victory for the existing member parties, because it meant that a powerful country, that could bring credibility and importance to a coalition previously lacking in both areas, would be joining their ranks.

In Europe, the single currency created additional problems because of overvalued exchange rates, and high bond yields.” (Pettinger, 2013).

The European Union was established as an economic and political partnership between 28 European Countries (European Union, 2015). The UK has been stayed in the EU for over four decades from 1973 to now. In 1975, Labour Prime Minister Harold Wilson had ever held a referendum on Britain’s membership in the EU and the voting result is to stay in the European Community. Recently, the article (BBC NEWS, 2015) reported that the UK has a plan to hold the second referendum by the end of 2017 to decide whether or not the UK should stay in or leave the European Union. This might be a significant referendum that may bring lots of impacts on the UK’s economy.

When considering joining the European Union, countries think about how they will benefit and one way they can benefit, is through the economy. First of all, there is a common currency, the euro. This makes moving from country to country easier, as well as giving nations in the European Union a feeling of unity. Europeans can move freely within Europe and do not have to worry about exchanging currency. Having the euro is also beneficial because it eliminates trade barriers, by having the same currency, it will be easier to trade. There will be no need for conversions when trading throughout the European Union. Also, the free trade area is beneficial

As one of the wealthiest nations in the union, the UK has to share much of its wealth with smaller and poorer countries in the nation. Although this creates a stronger bond within the countries, this prevents any country becoming too powerful and also creates additional costs to the country. European Union membership costs are high. According to Nigel Farage, EU membership costs the UK £55 million a day. Which pushes the United Kingdom into a budget deficit.

One major event that took place in the latter part of 2014 was the vote on whether Scotland was to continue being a part of the UK – the Scottish Referendum. The vote took place on the 18th September 2014, with 84.6% of the Scottish population voting. The question that was asked to voters was ‘Should Scotland be an independent country?’ The result of the vote was 55.5% voting ‘No’ and 44.5% voting ‘Yes’ (The Scottish Government, 2014). The result of this vote had potentially harmful repercussions for many country’s monetary and financial systems, including the UK. This report will critically evaluate the impact that the Scottish Referendum has and may have for the UK.

Britain have got themselves in a messy situation but the way forward is not. There are few alternatives they can choose from. One of the options is the Norway option, the Norway option gives the country full access to the single European market without being a fully paid – up member. The Norway model will also mean that Britain becoming members of two key European organisations, the European Economic Area (EEA) and the European Free Trade Association (EEFA).

Discuss the benefits of the European Union (EU) for its member states. Does the recent financial and debt crisis provide arguments against regional economic integration?