Evaluate whether or not the UK should join the Euro.

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Arjan Thethy 11.T        Economics coursework        Mr Pettitt        

Information for the Examiner

The purpose of this coursework is to evaluate whether or not the UK should join the Euro.

Forms of research

Research was done through newspaper articles and the internet.

Result

        I came to the conclusion that the UK should not join the Euro.

Introduction

The Euro is a single currency that is supposed to be used by the fifteen countries that make up the E.U (European Union). At present, twelve of the fifteen countries use the Euro as their national currency, the countries that are not using it are Denmark, the UK and Sweden. There are reasons for and reasons against the UK joining the Euro.

Advantages of joining the Euro

One of the main reasons for the UK to join the euro would be to encourage trade with E.U countries. Encouraging trade is important because it increases competition among businesses causing the businesses to increase the quality of their goods and decrease their prices, which is good for the customer as they will save money and receive better quality goods. The customer will also have an increase in choice. Trade also lets countries specialise at what they are best at therefore increasing efficiency.

        Joining the Euro will encourage trade because it removes the need to change currencies, and changing currencies costs money, because the business will have to pay commission and administrative costs, it also takes time therefore businesses do not always like to do it.

Join now!

        Joining will also encourage trade because it will remove the instability and uncertainty of exchange rate fluctuations. For example, the current exchange rate is £1.4655 = €11 this means that approximately £1.47 = €1, due to the instability of exchange rates, by next month the exchange rate may be £1.00= €1. Due to the change in exchange rates, a French business would have to pay more than they did the previous month to buy the goods from the business in the UK. Due to the instability of the exchange rates, firms are put off from trading and making long term contracts.

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