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

The Euro Debate

Extracts from this document...


Contents Page Sub-heading Page What is the Euro? 2 What is Economic and Monetary union? 2 What determines the external value of the Euro? 2 What Monetary and financial precepts do participating states have to follow? 2 So how does it work? 3 Why is the Euro in trouble? 3 Why did the Euro get so weak? 3 Why does everybody criticise the European Central Bank? 3-4 So that's it for the Euro, then? 4 Does monetary union bring any advantages at all? 4-5 And what do the Euro critics say? 5 Personal views 5 Bibliography 6 What is the euro? The euro is the single currency of the European Monetary Union, which was adopted by 11 Member States from 1 January 1999. The 11 Member States are Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland. Greece became the 12th Member State to adopt the Euro on 1 January 2001. The name "euro" was chosen by the European Heads of State or Government at the European Council meeting in Madrid in December 1995. What is Economic and Monetary Union? ...read more.


To invest in US companies, they had to sell euros and buy dollars, which drove down the euro's value on the market. Another factor were stock market investment flows. Higher productivity of US firms resulted in higher company earnings. Coupled with high interest rates, this made the United States a preferred destination for European stock market investors. Once again, the euro was sold in favour of dollar investments. At the beginning of the year, the picture changed. The US economy slowed down sharply, while eurozone kept posting strong growth. US stock markets, meanwhile, were in deep trouble. Both factors boosted the euro - but not enough to push it to its launch value. As a matter of fact, as signs of a slowdown of the eurozone emerged, investors fled yet again into the dollar, even though the economic prospects of the US economy are still markedly worse than those of the 12 countries using the euro. Why does everybody criticise the European Central Bank? It's a question of market confidence. Currency traders are still unhappy with how the ECB conducts its monetary policy. ...read more.


Could small states be outvoted by big economies? Will large countries outmanoeuvred by the small nations ganging up against them? Will economic and monetary union not ultimately force all members to harmonise taxes and other policies, thus eroding political sovereignty? And what happens during a serious economic crunch? Competitive devaluation - as Brazil's government did during its economic crisis in 1999 - would not be an option anymore. Personal Views In my personal opinion, joining the Euro would be a bad thing for the United Kingdom. Throughout this project I have weighed up the good and bad points, the pro's and con's, of the United Kingdom joining the Euro, and although there are advantages to joining the European single currency, I still believe that there is no need for this change, and that the UK economy will prosper without joining the Euro. Over the years we have learned to use the strength of the pound to our advantage, and have successfully used interest rates as leverage in business deals and suchlike. Such an upheaval in our economy must have a huge advantage or it is not worth doing, and in my eyes, the chaos of this historic change would out-weigh the advantages it would bring us. ...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. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    Perhaps that is because there is such a wide gulf between legalizers and prohibitionists" (Miron). What these economists will do is criticize current policy. They say "that over the past 25 years in the United States, enforcement of drug prohibition has increased substantially while production and consumption of drugs have likely increased, and prices have fallen dramatically" (Prohibition 6).

  2. UK Membership of the European Monetary Union.

    The constraints placed on euro-zone countries by the one-size-fits-all interest rate policy and the requirement of complying with the stability and growth pact will remove their freedom to react to changes in economic circumstances at a national level. * Since the responsibility for setting interest rates in the UK now

  1. Case Study: The Home Depot

    Chapter 7: Large box (endless selection) versus smaller stores (convenience). This chapter will explain what the differences and similarities are between the big box stores and the smaller stores. A short explanation is dedicated to both chains. In 1998 Home Depot opened four small outlets in New Jersey.

  2. "Marks & Spencers" and the EMU.

    * Changes in cost and efficiency E.g. lower costs emerge because of economies of scale or technological process innovation; higher cost emerge because of sharply rising costs for a critical input such as labour or raw material or component or energy costs. * Regulatory influences and government policy changes To many companies, domestic political considerations are likely to be of prime concern.

  1. Economics of European Integration

    be in the process of reintegrating business that the government initially kept separate. In England and Wales, both the major fossil fuel generators, National Power and PowerGen, have sought to acquire a distribution and supply business in order to increase access to final customers.

  2. Do the Benefits of Joining the Euro Outweigh the Disadvantages?

    These are quite separate issues, and the former seems considerably more likely to be significant. In fact the Invest in Britain Bureau announced in March 2000 that Britain's stock of inward investment rose by 25% (to about �250b) in the first twelve months of the Euro.


    Financial Services Industry The UK economy has enormous earnings from the financial services industry. If the UK had joined the EMU, the European central bank, ECB, would possibly have been located in the city of London as against Frankfurt.

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

    Lower interest rates & more investment "The stability pact (the main points of which were agreed at the Dublin summit of European heads of state or government in December 1996)

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