Year 12s: what will be the first way you research your future options? >>

Euro

hello,
has anyone completed a piece of coursework about the advantage and disadvantages of the UK joining the euro? If you have please can you help me on it, i am particulary stuck on the economic effects of the UK joing the euro.

thanks for anyone who can help
your kindness may be rewarded!

Reply 1

Chris87

I do politics so I may be able to help but my knowledge of the Euro is limited as we don't go into it in a great depth.

Advantages:

It can act as a rival to other currencies such as the US dollar. This is because the economic power of Europe is being pooled and being used in the interests of the whole of Europe.

The pound may not be able to survive with many countries merging their currencies.

Interest rates would be lower than they are now, hence it would cost less to borrow money.

Disadvantages:

UK loses control over interest rates. Therefore, it cannot control its economy as much as it would outside the eurozone.

The pound is still a strong currency and this would be lost forever if the UK joins.

The UK economy would need to grow at the same rate as other UK economies. This is important because if the UK is growing faster than the rest of Europe, the UK will want higher interest rates in order to slow growth so that it doesn't get out of control. However, the rest of Europe will want lower interest rates so that their economies can grow faster. In other words, it is hard to have a one size fits all interest rate.

I think you're probably looking for more than those arguments I've outlined above but those should start you off in the right direction.