Should Britain Join The Single Currency?
The debate has waged for several years now, ever since news of a single European Economic Union came first surfaced nearly fifteen years ago. The idea was simple, and focused on allowing multi-national European countries greater ease, and cost effective benefits when trading between countries. In a sense, the EEC was trying to implement an economic model similar to that of the United States, where amongst all fifty of the states there existed a single currency under a central federal bank that controlled the national interest rate level and other currency issues. Thus trade between the states was eased, promoting companies both with nation-wide interests, and those wishing to build from regional to nation wide platforms. However, since the official launch of the "Euro" in January of 1999, Britain, along with Sweden and the Dutch population, have chosen to remain isolated from this conglomerate, creating what many term a "two-speed" European economy. But why does the Britain business sector choose to remain isolated from this currency? This essay will attempt to examine both the positive and negative aspects of joining the single currency, while analyzing the forces behind Britain's involvement.
So what exactly are the benefits of a single currency for Britain's business sector? First of all, firms that export a lot to other countries within the euro zone don't have to bear the costs of exchanging profits into their home currency anymore. Multinationals also save a lot of money if all their subsidiaries trade in the same currency. Smaller firms suddenly are finding customers in regions they thought they could never be bothered to export to. The disappearance of these transaction costs is bound to boost economic growth, and will make goods cheaper for consumers. And even the weak euro has been a boon for the euro zone, as its exports to the United States and the UK have become more competitive. The Financial Times noted, while the value of the euro...
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