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Outline the arguments for not joining the Euro.

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Introduction

Outline the arguments for not joining the Euro. There are numerous arguments that the British government have recognised outlining their decision in not joining the Euro. If Britain joined the euro they would only be one voice out of twelve countries, meaning less influence on policies. Once Britain signs for the euro they would be joined into an irreversible agreement. Many European countries have a desired goal of joining to create a 'United States of Europe' which would involve the submission of Britain's sovereignty and subsequently their global independence as a currency. The British public have voiced their enthusiasm towards having a more localised political management system. The introduction into the Euro means that the political powers of electorates would not be as strong on a local scale if the interests of mainland Europe were to be influential as well. It would create almost a disenfranchisement of political power in Britain away from a local level and more towards a national level. We only have to look at the poor turnout in Britain at the elections for the European parliament to see the disinterest that people have about joining. ...read more.

Middle

In recent years the Bank of England has proved very successful at controlling inflation making Britain no longer the high-inflation capital of Europe, but having a similarly low level to Germany and France. Britain's economy is so out of step with other mainland Europe countries that it would only be to our disadvantage join. One reason why our economy is out of step to that of mainland Europe is partly because we have much closer ties to North America than they do. More than half our trade goes outside Europe, and most of our trade is done in dollars. Over the past three economic cycles the British economy has been seen to be more similar to that of North America than with Europe. Evidence of this is that since the pound fell out of the exchange-rate mechanism in 1992, it has remained relatively stable against the dollar, but very volatile against European currencies. However, the euro has been very volatile against the dollar, so locking the pound to the euro would actually mean more currency instability for the majority of exporters, not less. In contrast, countries on the European mainland do a higher proportion of trade with each other, and their economies are far more integrated. ...read more.

Conclusion

Euro countries will economically progress as a team due to a more integrated trading pattern between them, resulting in greater competition between the different countries companies and providing a greater incentive to invest across boarders. Britain on the other hand will be left on the edge of Europe with a loss of support and trade from its closest trading allies. To conclude with I would say that the positive aspects of deciding to stay an independent currency would be a sensible decision in an attempt at keeping the British economy as stable as it is at present. I think that joining a 'one size fits all' interest rate could only do more harm than good, especially on this large a scale of an operation. If other Euro countries were to be in recession and interest rates were fixed to aid these countries then it would be our economy that would suffer as a result. The time and effort involved in changing currency will be wasting our attentions towards more vital aspects that need attending too such as the NHS. If we were not to join though we may be left out of what could be a globally dominating currency in future years to come. The Euro can only really strengthen over time, especially with internal trade between Euro countries made easier with the single currency. ...read more.

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