Should The United Kingdom Adopt The Euro?

The Euro and its Impact on the U.S. Economy The euro is the official currency of the following 12 European nations: Belgium, Germany, Greece, Spain, France, Luxembourg, Ireland, Italy, The Netherlands, Austria, Portugal, and Finland. Although it has been the official currency since January 1,1999 it became physical tender which can be used by all participating countries on January 1,2002. The introduction of the euro into the world was truly a historic event; it represented a unity never before seen in the history of Europe, a common currency. After years of negotiations and much skepticism from around the globe, the implementation of the euro is no longer an abstract ideal, but a change that nations, corporations, and investors must

As of 2012, only seventeen of members of the European Union have decided to use Euros as their currency. In order for the members that adopted the Euro as their currency to successfully help their economic problems, the Eurozone members had to follow strict instructions put into place the European Union. The strict policies included strict control over inflation, government debt, and long-term interest rates (Mckee 525). The union put these strict policies into place to give the union the tools that it needed to take in order to help fix the economic crisis in each country participating in the Eurozone. Without the full cooperation of each country, it could cause the plans to fix the economic crisis within each country to fail because of the different interests by each individual country.

The euro is not the currency of all EU Member States. Two countries (Denmark and the United Kingdom) have ‘opt-out’ sections in the Treaty excusing them from involvement, while the rest (numerous of the more recently agreed EU members plus Sweden) have yet to meet the situations for approving the single currency.

A goal of the EU is to standardize currency amongst all the EU countries with the Economic and Monetary Union (EMU). In 2002, 12 of the EU countries replaced their national currency with the euro. The 10 most recent additions to the EU as well as Sweden, the United Kingdom and Denmark have not changed their currency (Wikipedia, 2006).

Whether the United Kingdom decides to join the European single currency and replace the pound with the euro will have profound economic as well as political effects on the country so is a very important decision and has considerable variations in attitudes towards the topic, although the British public opinion has consistently opposed joining the euro. The euro is currency shared by 18 of the European Union's Member States. The euro was introduced in 1999 and automatically became the new official currency of 11 States, followed by another 7 countries joining to date. However, the UK negotiated an opt-out to from the Treaty meaning they don’t have to adopt the common currency as they fit a certain criteria [1]. Joining the European single currency can have major advantages for the UK, such as diminished uncertainty of exchange rate for businesses and the decreased need to pay transaction costs of changing currencies when abroad. It can also have disadvantages such as loss of domestic monetary policy and variable rate debt in the UK.

The euro (€) is the official currency of the Eurozone, which consists of 17 EU member states using this currency. The euro is also the 2nd largest reserve currency as well as the 2nd most traded currency in the world after the United States dollar. As of November 2013, with more than €951 billion in circulation, the euro has the highest combined value of banknotes and coins in circulation in the world, having surpassed the U.S. dollar.

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

The Eurozone is the economic region formed by those member countries of the European Union that have adopted the euro. (Perry, S. 1994).

A few European countries (17) came together to form EU on 1st January 1999 establishing common currency for all the EU nations i.e. Euro.

2. Consumers would not have to change money when travelling and would encounter less red tape when transferring large sums of money across borders. It was estimated that a traveller visiting all twelve member states of the (then) EC would lose 40% of the value of his money in transaction charges alone. Once in a

European monetary union is based on the assumptions of presence of fixed exchange rate, free movement of capital and coordinate monetary policy. Fixed exchange rates are preferred by producers and consumers of the European economy, since the economy becomes more predictable. In such market conditions, it is easier to foresee the future and plan the actions that are to be taken up in the future. The second assumption - free movement of capital - is crucial for optimizing the use of capital and for enlarging the benefits that come from it. The third assumption is coordinate monetary policy; its role is vital in creating monetary union, since it ensures that the countries participating in the union have the same aims and together strive to

In 1999 seventeen countries in the European Union adopted the Euro forming a Euro Area. With the adoption of the Euro these seventeen countries discontinued their old currencies and monetary policies. Monetary Policies

The roadmap of making it a hub of free market economy was fostered by the launch of a single currency across the region ‘EURO’, currently the common currency of 19 states out of 28 EU member states creating a ‘EURO Zone’. Also, simultaneously it created Economic and Monetary Union (EMU) maintaining a uniform monetary policy in EURO Zone. However, EMU is not a single institution, its main actors are ("Economic and Monetary Union - European Commission", 2016):

The Euro was launched as a single currency electronically on 1 January 1999 in 11 European Monetary Union (EMU) member countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain). However, the origins of its conception go back to the launch of the European Monetary System (EMS) in March 1979. The EMS was created with the goal of currency stability and low inflation across Europe via an Exchange Rate Mechanism (ERM) that was based upon a quasi-currency, the European Currency Unit (ECU), which represented the weighted average value of member countries’ currencies (European Central Bank, 2014).

The Euro is the common currency of the European Monetary Union (EMU). The national currencies of the participating countries were replaced with Euro coins and bills on January 1, 2002. The countries that participate in the Euro Monetary Union (EMU) are Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, and Finland (http://europa.eu.int/eoro/entry.html). These countries irrevocably established the conversion rates between their respective national currencies and the euro and created a monetary union with a single currency, giving birth to the euro. Euro banknotes and coins entered circulation on 1st January 2002.