The Debate Of Britain Joining The Euro Currency

1788 words - 7 pages

The Debate of Britain Joining the Euro Currency

On the first of January 2002, several European countries joined the
Euro, a single

form of currency, which replaced these countries' own national
currency, meaning

that all countries that are a member of 'Euroland' accept the Euro as
their currency.

Among these countries were Ireland, France, Germany, and Italy. As
yet, Britain has

opted not to join the Euro.

Many argue that Britain should join the Euro, for both political and
economic reasons.

Economically, Britain is separated from the rest of the European
countries who have

adopted this currency, along with Sweden and Denmark who also opted to
stay out

of the Euro. This means that British businesses cannot share the
benefits of being

part of the Euro with the rest of Europe, as they are separated from
the main part of

the market by the variable exchange rate. British companies who export
to, import

from and invest in the rest of Europe will be less likely to do so in
future because of

uncertainty about profits because of changes in the currency and the
value of the

pound. The result will be British businesses retaining a more domestic
approach to

future investments, staying at home rather than investing abroad for
fear of loss in

profit. Equally, European companies will be reluctant to do business
in Britain. The

government's decision to opt out of the Euro means that British
companies risk

missing out on the benefits offered by membership of the Euro, such as
the

opportunity to be one of the leading exporters in 'Euroland'. In the
long term, it will

damage the competitiveness of the British economy.

According to the National Institute for Economic and Social Research
(NIESR),

Britain is economically ready to join the Euro, without posing any
serious problems to

the British economy. A Treasury report has shown that the British and
European

economies have converged to the point where the Government can prepare
for

successful entry into the Euro. This shows that adopting the Euro
would be an

economic advantage to Britain, both now and in the future.

Politically, Britain cannot remain one of the leading countries in the
European Union

as long as it remains outside of the Euro. The opportunities for
Britain to assume a

leading role are great. Both France and Germany, the leading countries
in the Euro,

are looking for British support, but are both unprepared to trust
Britain fully as long as

we remain outside of the Euro and are therefore uncommitted to the
common policies

of the Euro member countries. The relationship between France and
Germany is in a

troubled state at the moment. With ten more countries likely to join
the European

...

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