A brief description of the pros and cons of joining the Euro, and the problems that may be faced by the UK in the future

Essay by juno_theHigh School, 10th grade October 2003

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There are several arguments as to why the UK should adopt the euro but there are also several arguments as to why we shouldn't. Some people argue that jobs are being lost because of the decision to remain with the pound for the time being. Companies such as Matsushita, Hitachi, Canon and Sony have all cut jobs or moved production to other parts of the world because of the high rate of sterling against the euro. This means that the UK is less efficient and isn't maximising its labour, this will have a negative impact on the balance of payments. Also people are worried that if the UK doesn't adopt the euro future investment will be lost. Eventually demand for UK goods may decrease, as it is easier for firms within the 'Euro-zone' to trade with each other due to price transparency. Price transparency is a major advantage as it would make it easier for a consumer to compare goods and this would force companies to become price competitive.

This is good for the consumer. Price stability would make it easier for firms to plan and trade would increase between the other eleven countries who have adopted the euro. If the UK joined the euro then it would be more convenient for tourists to visit and for goods to be exported and imported because currency wouldn't have to be changed, as this costs money it would also be cheaper. The European Commission has found that the UK is already using the euro in international transactions so adopting the euro would just be taking the next logical step. Also a higher percentage of UK firms have a euro bank account than the EU average. This suggests that the UK is already involved with the euro and because it has had no...