These factors will eliminate additional costs associated with national currencies, enhance price stability and transparency.
It will also simplify travel across Europe, with prices stability and transparency. It will also simplify travel across Europe, with prices becoming fixed and travel more frequent. Another advantage would be the revenue saved in the transferring of one currency to the other, such a saving to the average person could mean a better holiday.
If the single currency is embraced by Britain it may stimulate employment and will be able to compete with the dollar which has not been possible with regard to the national currencies of European countries, this would lead to both low inflation, and a stable monetary economy. However there would be some disadvantages of Britain scrapping the pound in favour of the European single currency. Some of these problems would be that the member states will lose their monetary policy freedom; governments will affect the employee’s contract in money terms.To even change all the machines, i. e.Cash machines, tills in be a long and costly process, not only will these be affected but so will all the business who have to change their computer systems. Only this week Tony Blair stated ‘Britain s future is inextricably linked with Europe.
After four and half years in power, the Governments only action on the Euro has been to invent a policy that prolongs the procrastination as long as possible. If it were really in Britain’s interest to join the Euro and embrace the idea of Europe as one, as Tony Blair suggests it does, an evaluation could have been made within weeks of the 1997 election, and we could have joined straight away.The truth is that the British public, perhaps led by Gordon Brown do not want to see our economic sovereignty transferred to Brussels or Frankfurt. However a key question is whether Britain has been damaged by not being fully involved in the European Union. Tony Blair often stressed that Britain still has the lowest Unemployment rate in Europe, and the lower inflation rates.
We are the second largest economy behind Germany which is about to go into a recession whilst our economy is at least growing, so at least it can be argued whether we would be doing any better if we were fully pledged member,Gordon brown has taken the risk of asserting that the growth in Britain next year would be 2-2. 5% a level similar to the trend rate.Higher use of Euros in portfolios will depend greatly on economic factors, such as inflation, the value of the Euro in relation to the US$ and the Yen, Growth in Europe and the obvious political factors and arguments that go with any major democratic government. In a counter argument the structural weakness of the Euro, greatly effecting Britain decision. In my conclusion I have highlighted five specific Tests for Britain’s Entry to Europe.Would entry be good for jobs, Investment will continue to come to Britain. Financial Services Industry will continue to dominate.
Whether Business Cycles are compatible, whether there is sufficient flexibility to deal with problems. None of these factors have been met yet and it is unlikely that they will be clearly met. It has been argued that the European Central Bank’s decisions will have an impact on Britain. Close attention will be required on the interest rates. Currently the interest rates will decline. There are several factors that may work against Britain.
There could be a high degree of sterling volatility against the Euro. London may lose its position as the international financial centre. The government and central business will study the success of the Euro and see when the time is right. Although I have offered many facts about the pros and cons of joining the European single currency, ultimately it will be up to the British public in a referendum.
It will be interesting to see how the media uses its influence as to whether the public will favour entry into Euro Land.