This would be particularly useful for a chain such as Asda who are seeking to increase their market share and are constantly competing with the likes of Tesco and Sainsbury’s.
The main argument for membership is that of the benefits that removing exchange rate uncertainty will bring. If there was a common currency within Europe, businesses could be more confident about investment, as they wouldn't need to worry about what effects fluctuating exchange rates would have on them.
This should lead to more investment in the Euro area and promising trade within Europe.
This can also help to reduce costs, as economies of scale would be able to be more easily achieved, as companies can benefit from a greater variety of suppliers who are likely to become more competitive, also meaning lower prices.
As a result this would also allow firms, such as supermarkets, to save time and money, through easier accounting and banking
The single European currency's ease of trade would allow the easy establishment of Trans National Corporations (TNC's), which would create more jobs for more people on a greater geographical scale.
This would mean that benefits could be lowered, as not as many people need to claim them. The money saved from benefits would mean that more money is available for public spending, so public services, such as the NHS would be able to offer more quality services.
But some argue that the 'menu costs', i.e. the costs to businesses of having to change all prices to Euros, will be significant. This may hit small to medium sized businesses very hard.
A single currency however will allow easier price comparisons between countries (price transparency') and make it harder for companies to get away with charging falsely high prices for goods and services in the United Kingdom and other countries.
Britain's big businesses will gain if we were to enter the euro i.e. the USA would rather invest and trade with Europe rather than Britain so Britain will get more trade and more investment which could improve the economy quite considerably.
However there are arguments against the Euro which have so far prevented Britain entering the Euro in 2002.
Currency unions have collapsed in the past. There is no guarantee that EMU will be a success.
People have not forgotten the failure of the ERM in 1990 when Britain joined a union and came out worse off.
It is quite possible that the monetary union will not be sustainable; meaning countries that find themselves to be in difficulty may cancel their membership and re-establish an independent currency.
Looking at the moral aspects of the argument, the loss of our own currency would be a loss of our heritage, our independence, and our freedom.
Many people do not want to see the face of the Queen banished from the head of our coins to be replaced by something unfamiliar and European. The British nation has a reputation of independence but many people believe the Euro will take that away from us.
Another key argument against entry is that if Britain were to join the Euro, our interest rates, currently the tool used for control of inflation by the Bank of England, would be set by the European Central Bank (ECB). Since being given independence the Bank of England has been successful in controlling inflation in this way. Problems could well arise if Britain loses interest rates as a tool for its own economic objectives.
So, as you can see, there are two sides to this debate, both providing strong arguments.
Having analysed both the pros and cons of membership in the Euro zone, I conclude that at this time it probably is not beneficial to join. This is for two main reasons.
Firstly, the UK economy is at its strongest at the moment and has still has prospects despite opting-out of the Euro for the moment. Capital inflow is likely to continue even if we stay out of the single currency and the UK still has attractive supply-side factors in both product and labour markets for foreign investors. Particularly, the UK will remain attractive for Far Eastern countries such as Japan and the so-called tiger economies.
Secondly, I think that currently the risks outweigh the advantages that would be gained. As mentioned before, the UK economy is at its peak and is doing considerably better than other Euro zone members. If the UK joined the Euro then it is highly possible that the less fortunate countries will drag the UK down with them,
