This will probably increase the sense of brotherhood between European countries. This has many benefits such as greater tolerance and even more free trade. A sense of unity is always important as it makes it easier for the countries to communicate and work together.
There will also be greater specialisation and businesses will enjoy greater economies of scale. The theory of comparative advantage says that as different countries realise their strengths and weaknesses, specialisation in an area such as Europe will occur. The Euro makes this easier, providing a measure in which the countries can measure their comparative advantage without the exchange rates.
Once the induction of the Euro goes through, nobody will need to keep reserves to support the currency against different currencies in Europe because they will all be one.
Once all there is one currency, the pricing by the companies will be easier to see through and will help the consumer. Many times, the companies manage to trick consumers with changing exchange rates but once the Euro comes in, the company pricing will become more transparent and consumers will get a better deal.
Everyone wants the Euro except Britain so they are a bit out of place. Having a single currency without one of the major countries not a participant will be a downside as the Euro will have to compete with the pound and will not be as efficient.
The pound is so strong outside the Euro that it has probably caused unemployment. Joining the Euro will probably bring unemployment down. Businesses have lost a lot because of the fluctuations and the high prices of the sterling. Their profit margin has sometimes been cut to 0 because of the fluctuations. Having a single currency will eliminate this.
There are also some reasons why Britain should not join the Euro. These will help us see whether it is really worth joining.
Joining the Euro will push up the price of food as the Common Agricultural Policy will have an easier job with a single currency. They will be able to set the food prices much, much easier without the hassle of exchange rates.
There is also the sense of lost sovereignty. If the Euro is adopted, the British people will dearly miss their pounds because they had a strong, patriotic bond to the image of the Queen on the notes. The pound has been there for so long, it is almost part of the British culture and many Britons will be driven by pure emotion when they choose not take up the Euro. Inducing the Euro will basically take away a part of Britain’s individuality and identity. Adopting the Euro will hand control of the taxes to the EU and therefore England’s people will be financially governed by Brussels.
Denmark didn’t join the Euro and therefore many of the people must have been fundamentally against it. There must have been pretty strong reasons to persuade the people of a whole country to vote against the Euro. This argument could be countered by saying that many countries did choose to join and therefore there must be some good reasons to join the Euro. The vote in Denmark was close and there are many differences between its economy and Britain’s.
Joining the ERM from 1990 to 1992 was a disaster for Britain and it took Britain a lot of money to restore the pound again. The pound was left at an all time low and a fortune was pumped in to restore it to its original value. There is no need to repeat that nightmare, should the Euro be a big failure.
Once the Euro is introduced prices are going to increase. The giant cost of the changeover will push up the prices to generate the funds lost in the changeover.
Europe has never really done anything for Britain except impose regulations and increase costs. Why should Britain suffer a loss and help Europe?
In conclusion, I think that there are valid reasons on both sides of the debate but it is just a matter of opinion as to which argument affects you the most. It will be up to the people of Britain.
