Should Britain join the Euro?

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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 Labour, the Conservatives, the Lib Dems and the UKIP 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 costs - they are involved in lots of exporting and importing. For example take a company, which imports its goods. Before they can import these goods they must first buy them, in this case they buy raw materials from France they must first change their Pounds into Euros. This involves a transaction cost – the company must pay another company a commission charge as a percentage of the money exchanged. This loses the Business money and can add up, especially when done with large sums of money. Thus if Britain joined the Euro there would be no transaction costs because we would have Euros as our currency and so wouldn’t need to exchange. Unfortunately this would also have a detrimental affect on the exchange industries and banks because many of the exchanges are from Pounds into Euros and back again. Companies such as Thomas Cook get part of their income from this and would lose out if we were to change to the Euro, though it should be noted here that if we were to join the Euro, these Business’ would lose out on revenue themselves.

Join now!

        At the moment there are floating exchange rates between the Pound and the Euro, this makes it hard for a business dealing in imports and exports to make a reliable cash flow forecast or to make decisions as to whether or not start making a new product – it’ll make a profit at today’s exchange rates, but will it in a year when they’ve changed? It’s impossible to tell. If Britain were to join the Euro then there would be no floating exchange rate between Britain and the Eurozone, thus the same company would be more likely to go ahead ...

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