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Discuss Whether The UK Should Join the Euro?

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Introduction

Discuss Whether The UK Should Join the Euro? [25] The case for Britain to join the Euro has many advantages and disadvantages. If the decision is to join the euro, it will be because the advantages will outweigh the problems and so joining will benefit the UK economy. A large advantage to joining the Euro is that there will be easier trade and may even increase trade as there will be a single currency within the European Union. Time and money will be saved as currency will not have to be converted when trading. This is also in the public's interest as they will also not have to exchange money when going on holiday. This will encourage many more people to go on holiday not only out of the UK, but may also boost the tourism industry in Britain. By joining the Euro, there will be no need for the British government to use interest rate controlling policies as the EU will set a general rate that all members have to follow. ...read more.

Middle

There are not only advantages to joining however; there are also many disadvantages to this. Most of the disadvantages are concerned with the identity of Britain. By joining the Euro, Britain will not only lose sovereignty, but with that goes the cultural identity as well as political sovereignty. This could cause citizen unrest as the culture is the public and many people may revolt against the joining of the Euro. Other drawbacks to joining are more economic, such as the loss of interest rate power. The interest rates for all countries within the Euro will be a general rate set by European Central Bank (ECB), and the UK will lose its independent monetary policy as a result. Another result will be that the EU will dictate the levels of government spending that can take place. At the moment, the EU has set a rule that no country can run a budget deficit of more than 3% of GDP. ...read more.

Conclusion

* Is the UK economy flexible enough? * Would joining improve FDI? * Would joining damage the City? * Would joining be beneficial to the economy? As you can see there is no mention of exchange rates in these tests, so how would they know when to join. The government needs to decide the correct exchange rate for Britain to join the Euro, as if it was too low, the public will not be happy as they will want to get as many Euros for their sterling Pounds as possible. But if it was too high, the economy will object. As you can see there are many factors that the UK government needs to consider before joining the Euro, such as exchange rates and the 5 economic tests. I order to decide what is best for the country and the economy, the government needs to weigh out the advantages against the disadvantages. From the evidence given, I believe the disadvantages outweigh the advantages and so the government should decide not to join the Euro. Liam Stuart 13GPG The Euro Economics ...read more.

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