Should the UK join the euro Essay Example | Topics and Well Written Essays - 1000 words

Should the UK join the euro - Essay ExampleThus it means giving up the traditional pound for a new European wide single medium of exchange that is already in circulation. Moreover, this would also facilitate the adoption of a common EU monetary insurance policy. That is why the British politics too is unhappy with the idea because it entails transferring power and sparing decision making to the EU bureaucracy. However, the government is non fundamentally opposed as long as there are demonstrated economic benefits of doing so. Also, if it does conciliate to join, it is a tough decision to make as to precisely when to join the bandwagon because this could have economic consequences too. hence there is the period of turbulence to endure before things settle.The main benefits of joining are due to the remotion of economic barriers that hinder trading. A common currency does away with exchange rate fluctuations and transaction costs. This for example, makes enthronization more attr active in the UK. So we have the potential to gain in the areas of trade and investiture but these benefits must be weighed against the effects of the loss of autonomy over macroeconomic policies and other complications. By not joining though, the UK risks being marginalised within the EU. And, the euro currency is a growing in strength. It is now the balls largest by cash value (Stevenson, 2009).A successful European wide monetary policy requires that there is economic parity or at least a convergence in the economic circumstances between the euro-adopting states. For instance, if the rest of the EU fares better than the UK during the looming recession, care rates are likely to be high and this would exasperate the financial difficulties of UK businesses and cause even lower output. On the other hand, low interest rates can cause higher inflation. This shows that the decision of joining and when to join is very much tied(p) to concerns over the level of convergence and interest rates and the impact this could have