• 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. Liberalization: where it has lead us and where it is headed

    These leaders not only freed India from foreign oppression, they also established a genuine democracy, complete with a free press, a real legal system, and extensive personal freedom. To appreciate what this means, one can compare them with some of the other successful revolutionaries of this century, such as Lenin, Mao, Pol Pot or Ho Chi Minh.

  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. The Famous Grouse - company profile and exports

    In some countries there are lower restrictions on advertising of alcohol. This could be key when trying to create awareness of the famous grouse being sold in their country. New Zealand Political Prime Minister- Helen Clark Capital: Wellington Population: 3,993,817 (July 2004 est.)

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

    But the Irish government doesn't want to cut government programs and it would rather cut taxes to stimulate incentives. So Irish demand is likely to stay too high, punishing Ireland's internationally engaged industries. These industries could contract and become more focused on a domestic market, forcing up Irish unemployment and

  1. Discuss Whether The UK Should Join the Euro?

    There will be no exchange rates to worry about which will enable firms to incest the exact amount that they want rather than a lower figure due to the � being too strong.

  2. Should the UK join the Euro?

    Previously, many companies have held their assets in dollars, which is preferable due to the liquidity of the dollar which means an ease in changing assets to cash, should the need arise. The Euro is said to create this more liquid situation and by holding assets in Euros, companies have an opportunity of reducing the costs of funds.

  1. Protectionism -Arguments for and against

    Dumping can be extremely dangerous to local producers. The General Agreement on Tariffs and Trade (GATT) and the European Community (EC) has banned the practice of dumping. The Cheap Labour Argument: Some suggest that industries need to be protected because they cannot compete with cheap foreign labour.

  2. Should Britain Join the Euro?

    This problem may be aggravated by the fact that Britain is very sensitive to interest rate changes. This is due to a large percentage of variable-rate mortgages, and companies being heavily reliant on debt finance for investment. Fiscal policy would also be lost, to a certain extent, as a tool

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