Why The Uk Should Join The Eurozone

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.

First with western Europe, and after the collapse of the Soviet Union, with the east as well. Many of these attempts were successful. One of the first of these attempts was the Marshall Plan which was used as an instrument to restore the economies of western Europe and to establish democracies. The plan would provide economic aid to fight the post war affects of poverty and in return expected cooperation for mutual benefit. The plan strengthened western Europe not as allies with each other and not against anyone. Another internal cooperation efforts was the formation of the European Economic Community(or Common Market) in 1957. The six original members were very successful and managed to eliminate all tariffs within their countries. After seeing this success, other nations applied for membership and EEC became what is presently know as the European Union. The European Union has been very successful in its endeavors to mutually help the member economies. One of these successful endeavours was the implementation of a common currency. As of 2002, seventeen countries now share the euro as their currency. This unifies where language and culture are barriers but money is not. Another major success in unification was the addition of ten members of the European union in 2004. Most of these additions were former Soviet bloc countries who had just a little over a decade free from Soviet influence. While this was a

The Euro is the commonly accepted currency for 19 of the 27 members of the European Union. It combines members of the European Union by creating the Eurozone, a negotiated partnership that share economic and political beliefs. The agreements made between these countries were expected to have a positive and

The European Union was born after the disastrous effects of two world wars with the idea to merge Europeans states into a single unity. Along with the purpose to bring economic and political partnership to bring peace and prosperity on the European continent. It now includes 28 European states as of this point. From this union, 17 members sought closer economic ties as well as monetary cohesiveness resulting in the formation of the Euro-Zone within the European Union. The Euro-Zone formed a single currency known as the euro that circulated among the 17 members. In addition, the citizens within the Euro-Zone may travel freely if they wish such as for going to work or simply on vacation without needing to be bogged down with passports or visas within the members of the Euro-Zone. Furthermore, this experiment has turned the Euro-Zone into an economic powerhouse for 60 years along with producing the world’s second highest GDP within the world economy; However, until recently this had not been the case. The Euro-Zone has a high probability of collapsing because of the debt crisis, the rise in nationalism, and finally Germany’s national interest that will lead ultimately to the Euro-Zones downfall.

The high level of openness and labor mobility are two of the essential criteria for a successful optimal currency area (OCA). EU and GCC countries are OCA in terms of openness because they have high economic openness level. Although the GCC has a low level of intra-regional trade, the fixed exchange rate regime still is the optimal due to the fact that the main export commodity is oil for GCC countries, they do not need to adjust the exchange rate between GCC countries due to their exchange rate fixed to the dollar which is the official currency of oil transaction. The EU is not OCA in terms of labor mobility because the labor movement is not free. However, currently GCC is an OCA in labor mobility aspect because

The introduction of a social and economic grouping is often to create a single market, such as was the case with the EU and NAFTA. The European Union is an economic and political union of 27 member states which are located in Europe – its roots are with the EEC which was formed in 1957. The European Union was fully established when the Maastricht Treaty came into force on 1st November 1993. The original objective of the EU was to create such single market, so that there was the free circulation of goods,

“The problem is that the European capitalists are attempting to move towards union at a time when the general economic conditions are pointing in the opposite direction. If they could obtain a rate of growth of 5 or 6 percent, as they did during the period of upswing, then they could bring about monetary union without too much trouble. But with growth rates of 3-2 percent or less this impossible. All this means that a Federal European

EU was founded in 1957 with a goal to build a common market. To achieve this goal a close co-operation on economic and fiscal policies between member states is needed. Hence, the Economic and Monetary Union (EMU) was born in order to achieve the single market goal. The coordination in Economic and Monetary Union involves the economic and fiscal policies through a common monetary policy for all member states and a common currency, euro. The European Central Bank (ECB) was created to take care of the monetary policy of the Eurozone and to be the national central banks of the euro area countries.

Nevertheless, the region continues to demonstrate that it can and will resolve each successive stage of the crisis by cooperating as well as sharing decision-making powers. In addition, the members of the union have been on the forefront in the generation of continent-wide institutions as well as building of substantial financial firewall to prevent debt problems from spreading. The region is creating a banking union and efficiency partial fiscal union. From this perspective, the common currency and the entire project of European integration will survive as well

Europa (n.d. d) describing the single market and related policies stated that all borders between Member countries disappeared allowing the freely movement for goods, people and capital in order to stimulate industrial and economical extending within a large area. Grabtree (2007) researching the EU operation has found that the introduced unique currency called Euro has an advantageous impact on companies function and on economy in general. He stated that transfers became easier, costs more transparent and prices on goods became averaged in the whole union. Such strengthening of the economy brought stability and bright future. Moreover, because all economies became unified, countries gained the ability as a common body to overcome financial crises and agree on issues that mainly affect the economy. The Europa (n.d. e) also made a suggestion that such strengthening of economy made possible the financial help for poor regions that require the raising of life standard. Because of this reasons it is beneficial to a country to join the union.

The Treaties of Rome which established the European Economic Community in 1957 announced that a Single European Market was the aim of the development which would accelerate prosperity and contribute to a closer union of the European nations. The Single European Act (1986) which launched the European Single Market programme and the Treaty of the European Union is based on this foundation. The treaties lead to the Economic and Monetary Union and are the cornerstones for the coherent currency. The third step towards the EMU began at the 1st January 1999, when the conversion rate was irresistibly locked in. From then on all the member states operated in a unitary monetary policy. The Euro was established as the legal means of payment and at first the eleven national currencies were reduced to subunits of the Euro. Greece joined the Euro system on 1st January 2001 and finally the European paper money and coinage were introduced to the 12 member states of the European Union on 1st January 2002. The introduction of the Euro presents a milestone on the way towards a united Europe in which the people, the public services and the assets have freedom of movement. The member states hoped to gain from the Monetary Union two kind of chances: On one hand it is supposed to present the motor for further political integration in Europe and on the other hand – in addition to the Single Market – it was expected to launch higher

This change, that would overcome the inherent economic flaws of the EU and EMU, is the adoption of a European Fiscal Union (EFU). The implementation of the EFU will prevent the issues that are occurring today in Europe, and ensure economic stability; thus, it will save Europe from failing.

The European Union (EU) is an economical and political union of nations, established in 1993,

“It is finally sinking in that the euro is here to stay…The Eurozone is again a club with a queue – not at the exit, but at the entrance” (Van Rompuy, 2013).

The advantages of the euro are various and are felt on various scales, from people and organizations to entire economies. They include: