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    Hi please could someone give me reasons for and against using the Euro in the UK. Ta.
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    (Original post by princessb)
    Hi please could someone give me reasons for and against using the Euro in the UK. Ta.
    The reasons can be put into two catagories: political and economic

    Ecomonically the Euro could be said to be a good thing because it creates price transparancy between countries, bringing prices down, and helping the EU common market. It means that someone in the UK being ripped off over car prices can go to France to buy the same car, and be able to compare the two prices exactly, without worrying about strong or weak currencies

    However, it does mean that our interest rates are set in Frankfurt, and would be set for the whole eurozone, not just the UK. This means that if we are going into a recession (when the Bank of England would normally put interest rates down to encourage spending and prevent the worst effects of the recession) the interest rates might be put up if say Germany is booming and wants to avoid their economy overheating. This could be very bad for business in the UK.

    Politically it can either be a good or bad thing depending on your outlook. If you want closer intergration with Europe it is good. If you want to keep the pound and British sovereignty, then it's bad.
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    (Original post by winorloose)

    However, it does mean that our interest rates are set in Frankfurt, and would be set for the whole eurozone, not just the UK. This means that if we are going into a recession (when the Bank of England would normally put interest rates down to encourage spending and prevent the worst effects of the recession) the interest rates might be put up if say Germany is booming and wants to avoid their economy overheating. This could be very bad for business in the UK.
    To further this point, if you analyse the business cycles of the UK/EU15/US over the past decades, you can see that we are linked considerably more to the US economy than the EU15 economies. It is very often the case that Europe is booming whilst Britain is in recession, or vice versa.
 
 
 

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