THE UK AND THE EURO

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Introduction:

Economic advantages and disadvantages to the UK of participation in the European single currency, Euro. Will British businesses be better or worse off if the country decides to participate?

The Second World War which ended in1945 left a disastrous effect on Europe. Europe was greatly devastated politically and economically creating a divide among the people. The union grew out of the carnage and devastation of the war and has proved to be the world's greatest peace process, uniting old enemies and friends alike in a common effort to ensure peace, freedom and prosperity for all of Europe.

The freedom and prosperity of the region were the core goals of the enabling treaty which has been successful. Today, the region has witnessed a lot of unprecedented growth in its economies.

In a bid to boost the economic well being of the region, it was envisaged that a single currency among other factors for the member states will enhance the progress of businesses in Europe. Whether the single currency will be of benefit to the UK has remained a debate over these years. Will it really work? Will UK be better or worse off?

Chapter 2: Origin of the European Union/ Objectives

The European Union came into being following the treaty of Rome which was signed by six member states namely; France, Netherlands, Belgian, Italy, West Germany and Luxembourg. They were commonly referred to as 'The Six'. The union was basically formed to enhanced peace, political and economic growth among members who were greatly devastated by War.

The membership has risen to 25 following the joining of Poland, Romania, Bulgaria, etc. UK, Denmark and Ireland joined in January 1973, Greece in 1981, Spain and Portugal in 1986, Austria, Finland, Sweden, in 1995 while East Germany reunited with West Germany in 1990. The population of EU is in excess of 455 million people.

Common Market

Market can be defined as a setting where buyers and sellers meet to carry out transactions. In the context of our discussion, the common market is a physical geographical boundary within which goods and services can move freely. It is a market comprising of a group of countries which have no trade barrier between its members.

The Origin of the Euro

The treaty of Rome which was signed on March 25, 1957 resulted in the formation of the European Economic Community and later European Union formed the platform for a single market and obviously created the need for a monetary co operation between it then six member states. Events moved from EPU to EMA.

On January 1, 2002, the Euro became a legal tender. Some of the elements of the EMU include single currency, a European central bank, European economic policy and political control.
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Chapter 3: Advantages and disadvantages of the Euro to the UK

1. External economic instability

The death of a sole trader might likely bring the business to a sudden end. Losses are bore by him alone. But in partnership, losses are shared by the partners. The effect is not actually felt as in sole trading.

Likewise, the EU member states are in partnership in the use of the Euro as a single currency. The Euro economy is of sizeable importance when compared with the US and Japan that have achieved enormous success as a ...

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