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Advantages and Ddisadvantages of UK Participation in the European Single Currency Essay Example

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Advantages and Ddisadvantages of UK Participation in the European Single Currency

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Advantages and Ddisadvantages of UK Participation in the European Single Currency. Euro is used by 329 million of Europeans. According to the research conducted by IMF European Union is the second largest economy of the world. Euro is formally organized and managed by European Central Bank and the Central Banks of the EU countries. Euro is today world’s most important currencies after the Dollar. Not all the EU members accepted Euro as a single currency for European Union. One of them is United Kingdom, but 90% of the international trade and transactions in UK takes place through Euro. Pound Sterling is used for local transactional purposes (Hilliard, B.The law of one price minimizes the differences in price level. The different currencies cause difference in prices in the region due to the rate of the currencies.

It causes inflation or may be deflation in the same geographical region.The Euro makes EU a strong and powerful trade partner. The investors from all over the world can invest in European Union without any restrictions and hurdles. It eases and promotes the trade with countries from other continents.The Euro makes European Union an attractive region for the investors to invest in; the foreign companies are benefited to do business all over Europe. Euro provides access to a single market for the foreign investors.The Euro is a single currency of the European Union which gives the citizens of the Europe an identity of their own. They feel proud of their currency and region as the area and the benefits for its member states increases.A single currency attracts the markets all over the world to invest in the European Union. A third country prefers to invest in the EU due to an advantage of same currency because it makes EU more powerful.The member countries of European Union are strongly integrated with each other through trade and a single identity through the similar currency. So it is obvious that these countries cannot wage war on each other as they are bound together for so many positive reasons.It increases trade among the member countries of the European Union due to elimination of the exchange rate fluctuations and increased cooperation. The cost to industry is also reduced due to the reason that the firms don’t need to buy the foreign exchange for transactions within the Europe.There are no boundaries among the member countries of EU so it will promote a stable political environment and the people can be safer travelling in member countries. Travelling. Advantages and Ddisadvantages of UK Participation in the European Single Currency.

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References

Europa, (2009) [online] Available from <http://europa.eu/abc/index_en.htm> [accessed 18th April 2009]

Invest (2009) [online] Available from The UK economy at a glance <http://www.ukinvest.gov.uk/Information-sheets/4018290/en-GB.html> [accessed 17th April 2009]

Lib (2009) [online] Available from

<http://library.thinkquest.org/19110/english/advantag/advantag.html>[accessed 17th April 2009]

Invest (2006) [online] Available from <www.investwords.com>[accessed 17th April 2009]

Ventajas (2008) [online] Available from <http://www.dip-badajoz.es/eurolocal/entxt/emu/ventajas.htm>

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