• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Should Britain join the Euro?

Extracts from this document...

Introduction

Geoff Campbell 11T Should Britain join the Euro? INTRODUCTION: There are a lot of differing opinions on this subject. I will try to determine whether it makes political and economical sense for Britain to "join the Euro". I have researched into the arguments for and against, then I will explain them and make my conclusion after weighing up each of the arguments. I will research using the internet and search engines to find many differing opinions from a variety of sources. I will also visit the websites of Labouri, the Conservativesii, the Lib Demsiii and the UKIPiv to find out about their policies regarding the Euro. Advantages of joining If Britain were to join the Euro, it would affect many Industries, Businesses and Economies in different ways, whether they are in Britain or not. One example of this is when Businesses' are heavily affected by transaction costsv - they are involved in lots of exporting and importing. For example take a company, which imports its goods. ...read more.

Middle

It would therefore improve the economy as more Businesses would be willing to make more products. If Britain were to join the Euro it would become the target of Foreign Direct Investment (FDI). For example, a Japanese company selling guitars, e.g. Yamaha. If they were selling to a European market they would have to change their revenue from Euros to Yen. To circumnavigate this problem they could set up a factory in Europe, where their expenses and their revenue would be in Euros. Thus they would save themselves the transaction costs they would have otherwise paid in changing their Yen to Euros and vive versa. Disadvantages of joining Until recently (1997)vi interest rates were set by the government; the government often used their ability to manipulate the interest rates to their political advantage; e.g: in the 1980's the government lowered interest rates in the run up to the general election, so that more of the voters would be employed and thus more would vote for them. ...read more.

Conclusion

Again, if we join the Euro this will mask our Company's international competitiveness, but this in turn would force them to become more efficient themselves, which is good for the British customers. The estimated costs of changing our country's pound to the Euro is many times larger than the costs saved by businesses on transaction costs, though in the very long term it would make up for this. Conclusion In conclusion the arguments for joining the Euro are largely Economic, and the arguments for staying out are largely Political, like the country wanting to keep it's sovereignty. There are also questions of timing - what exchange rate do we join at? Perhaps the British economy has already got many of the benefits of the Euro even though they haven't joined. Also there is the issue of the inevitable collapse - will Britain be able to pull out if they want to. It would also seem that in the global situation there needs to be a counterbalancing force to the US and it's dollar. This could well be the Euro. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. THE UK AND THE EURO

    In other words, since the UK trades more with the USA, joining the EMU will have a negative effect on the UK since the Euro is unstable against the dollar. 6. Savers and Borrowers The capital suppliers and capital users will benefit if the UK joins in the single monetary union.

  2. The effect of the Euro on 'The Carphone Warehouse' Plc

    Despite the huge number of outlets, the group has no plans to stop here; an extra one hundred stores are planned by the close of each of the two coming financial years. The company's main foci in terms of European expansion are France and Spain.

  1. Entry criteria to the Euro

    increased, the convergence test is not met The Government is developing a policy agenda to deliver high levels of output and employment, which shows a commitment to building on the platform of stability, this will help to make the economy more convergent with the euro area for the future.

  2. The Famous Grouse - company profile and exports

    A series of land wars between 1843 and 1872 ended with the defeat of the native peoples. The British colony of New Zealand became an independent dominion in 1907 and supported the UK militarily in both World Wars. New Zealand's full participation in a number of defence alliances lapsed by the 1980s.

  1. The Quest for Optimal Asset Allocation Strategies in Integrating Europe.

    The more volatile and unpredictable exchange rates are, and the more costly hedging against uncertainty is, the stronger the degree of market segmentation and the lower the degree of correlation across markets. Thus, a more volatile exchange rate of a country raises the national risk premium as investors require a higher return to compensate for the increased uncertainty.

  2. Should we join the Euro?

    It is said to be calculated that two countries with the same currency would do thrice as much trade that with two countries with different currencies. However, if the market gets too big, there may start to be diseconomies of scale.

  1. "The British Government made a major mistake in not joining the Euro at its ...

    Countries also squeezed their economies in the first place to gain entry and with German growth falling last year at -0.1% it could easily slip into recession while the UK's growth remained strong at 2.1% last year. In terms of authority over the ECB it is only accountable to the weak European parliament.

  2. Discuss Whether The UK Should Join the Euro?

    Another large effect of joining the Euro that will positively benefit the economy will be the ability for increased foreign direct investment. With the single currency, many firms from other countries within the EU will be able to invest more directly as there will be no need for money exchanges.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work