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

THE UK AND THE EURO

Extracts from this document...

Introduction

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. ...read more.

Middle

This would have increased the level of activity in the city and subsequently increase income generated from that sector. This action could result in "banks relocating to the Euro zone, loss of jobs. In other words, it risks minimising our influence and maximising once again our chances of being once again shut out" 5. Trade The Euro zone is the second largest market after the US. If the UK joins in the EMU, she will witness a higher market trade transaction because the separate currencies which act as a barrier to trade have been removed. These will translate to a higher confidence in the minds of investors because there will e no more fluctuations in currency. Studies have shown that Canadian provinces buy and sell more to each other rather than their immediate neighbour, the USA. This is as a result of the use of same currency among the provinces. However, joining the Euro might likely have a negative impact on the UK economy. The Euro is quite unstable against the dollar and most of UK's export is to the USA, being the reason why the pound is stable against the dollar. This is because UK has refused to join the Euro zone. ...read more.

Conclusion

Nevertheless, if the UK joins, the ECB will concentrate on economic and fiscal policies towards ensuring a less volatile interest rate. Reference 1. Anon. Euro to benefit UK economy http://news.bbc.co.uk/1/hi/business/855310.stm (Date retrieved: Mon April 24, 2006. 2. Anon. (2005). Experts Highlight Success of Euro and Integrated Financial Markets. euinsight, May, 2005. 3. Anon. Ambassador's Corner www.eurunion.org/euinsight (Date retrieved: Mon May 1, 2005. 4. Anon. Macroeconomic Framework: benefits of a single currency to the economy as a whole http:// Europe.eu.int/comm./economy_finance/euro/benefit_1-en.htm (Date retrieved: Fri April 21, 2006) 5. Single market: reaping the full benefits of the EU's single market http:// rope.eu.int/comm./economy_finance/euro/benefit_2en.htm (Date retrieved: Fri April 21, 2006) Introduction: 1 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? 1 Chapter 2: Origin of the European Union/ Objectives 2 Common Market 2 The Origin of the Euro 2 Chapter 3: Advantages and disadvantages of the Euro to the UK 3 1. External economic instability 3 2. Competition/comparative advantage. 3 3. Exchange rate 3 5. Trade 4 6. Savers and Borrowers 5 7. Mortgage issues/interest rates. 5 8. Taxation 5 9. Inward investment 6 10. Cost of conversion 6 11. Influence 6 Will UK be better or worse off by joining the Euro: 7 Reference 8 ?? ?? ?? ?? 1 ...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. Macroeconomic Objectives and their impact on Business Activity

    Supply side policies designed to improve productivity may include education and training schemes. Supply side policies are therefore an important way of controlling inflation, but they are, like fiscal policy, used in conjunction with monetary policy. Supply-side policies on their own are unlikely to keep inflation at bay.

  2. A Comparative Discussion of Different Approaches to Entrepreneurship.

    It shows a wider sight of economic and psychological approaches. This approach considers sanctions presented by society and social structures to determine the extent and reasons for entrepreneur and its behaviours. Less comment on entrepreneurship are made or born, the sociological theory instead focuses on entrepreneurship as purely observable behaviour, and in so doing to socially explain entrepreneurial management.

  1. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    But because they do receive some of their funding from the government, the possibility is present. The Cato Institute was founded in 1977 and is a non-profit public policy research center (Cato). Unlike the Hudson Institute, Cato clearly states it will not take any government funds: "In order to maintain

  2. UK Membership of the European Monetary Union.

    The change over process to the introduction of the Euro will involve substantial menu costs for businesses and banks. Europe's labour and product markets are too inflexible to deal with the economic strains that EMU will put on them. If interest rates, exchange rates and fiscal transfers cannot be called

  1. "Marks & Spencers" and the EMU.

    * Globalisation of industries and business This increases the number of competitors in any one industry and intensifies competition. * Entry/exit of major firms E.g. Japanese (Toyota Lexus) entry into high-end car market will intensify rivalry in this segment. * Changes in cost and efficiency E.g.

  2. Chinese economy sets for soft landing in 2005.

    "This is going to be the world's most intensely competitive battleground for enterprises," said John W. Egan, Vice-President, Global Services and Strategy, and Managing Director, Greater China, A.T. Kearney, USA. To compete with foreign companies - even in their own market - Chinese companies need to see improvement in several areas.

  1. Economics of European Integration

    European companies overall welcome the deregulation in the electricity market As the consumption of electricity represents an important cost mainly in industrial activities, the European companies carefully keep an eye on the regulations set by the European Commission to introduce and continue the liberalisation in the electricity market.

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

    The first implication of this is lower prices to EU consumers of products imported and exported within the EU. As a result of this, the rate of inflation should fall, relative to the percentage change of price in imported products.

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