In fact, the euro caused precisely the opposite of standard economic policy to be implemented during the European sovereign debt crisis. 2013. Business benefits – European Commission. The British Retailing Consortium estimates that British retailers will have to pay between £1.7 billion and £3.5 billion to make the changes necessary (Baimbridge and Whyman, 2008). European Commission – Europa. More importantly, France and Germany supported a recovery fund worth over 500 billion euros. Typically, there would be no solvency fears for governments under a fiat money regime because the national government could order the central bank to print more money. The advantages of the euro include promoting trade, encouraging investment, and mutual support. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. By keeping the interest rate low or stable, this can improve profitability of exports and more businesses will want to invest in UK firms. Labor and goods can flow more easily across borders to where they are needed, making the whole union work more efficiently. Also less volatile interest rates will allow businesses to borrow at cheaper rates and also invest more confidently in the long term (Ec.europa.eu, 2013; Irons and Colander, 2002). Problems with the policies. UK Businesses may also have to drive down prices due to the combination of improved availability of information and price transparency. A single currency should end currency instability in the participating countries (by irrevocably fixing exchange rates) and reduce it outside them. The classic Keynesian solutions for these problems are entirely different. Registered Data Controller No: Z1821391. Thus, any reluctance to join could be seen as a refusal of deeper integration and also as unfinished homework. The only constant was that the euro continued to work in favor of Germany. Wei, L. 2009: Your portal to the world: Pro & Cons For UK When Adopting Euro. Rickard, S 2002, ‘E-Day: the Impact of the Euro on UK Business’, Credit Control, 23, 1, p. 14, MasterFILE Premier, EBSCOhost, [Viewed 9 February 2014]. 234 (IMF’s Occasional Papers) by Susan Schadler; Britain and the European Union – Frequently Asked Questions By Stuart Notholt; Britain, the Euro and Beyond by Baimbridge and Whyman. 1482 Words 6 Pages. For example, even a prosperous small Caribbean country can be devastated by a hurricane. The online scanning system matches your work against over 5 Billion online sources within seconds. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of AUEssays.com. Portugal, Italy, Ireland, Greece, and Spain all faced high debt, high interest rates, and high unemployment. The euro was created to promote growth, stability, and economic integration in Europe. On the downside, the euro was blamed for overly rigid monetary policy and accused of a possible bias in favor of Germany. Advantages Disadvantages 1. On the other hand, less efficient firms in nations with stable currencies enjoyed relatively low interest rates. Upper Saddle River, N.J.: Prentice Hall. The implication if UK joins the EMU has both advantages and disadvantages. Or, the fiat currencies are not based on a real standard, but on the simply trust of people. Due to the number of advantages such as the stimulation of trade and disadvantages such as economic instability, the decision for the UK to adopt the euro is a big economic and political debate at present which will affect businesses and the public in many ways. What are the arguments for and against joining the Euro. However, the European Central Bank's independence meant printing money was not an option for eurozone governments. The Pros And Cons Of Joining The Euro 891 Words | 4 Pages. The euro is the single currency established in 1999, currently shared by 18 countries of the European Union’s Member States (Ec.europa.eu, 2014). Those who support the single currency must consider that loss of control over monetary and exchange rate policy may weaken national economic management which, looking at previously strong economies like Germany will have a large impact on trade and business (CenuÅŸe, M, & Drigă, 2010; Baimbridge and Whyman, 2008), Ultimately there are many factors that need to be considered should the UK decide to adopt the euro or stick with the sterling. This problem has been solved! … Britain, the Euro and beyond. Mongelli, F. P. 2008. The high growth country ought to have high interest rates to prevent inflation, overheating, and an eventual economic crash. 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