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For instance, UK firms currently spend about 1.5 billion sterling a year buying
and selling foreign currencies to do business in the EU. p> With the EMU this is eliminated, so increasing profitability of EU firms.
Advice to young people: You can go on holiday and not have to worry about
getting your money changed, therefore avoiding high conversion charges.
Price transparency
EU firms and households often find it difficult to accurately compare the
prices of goods, services and resources across the EU because of the
distorting effects of exchange rate differences.
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Uncertainty caused by Exchange rate fluctuations eliminated.
Many firms become wary when investing in other countries because of the
uncertainty caused by the fluctuating currencies in the EU. Investment
would rise in the EMU area as the currency is universal within the area,
therefore the anxiety that was previously apparent is there no more.
4. Single currency in single market makes sense.
Trade and everything else should operate more effectively and efficiently
with the Euro. Single currency in a single market seems to be the way
forward.
5. Rival to the "Big Two ". p> If we look out in the world today we can see strong currencies such as the
Japanese Yen and The American $. America and Japan both have strong
economies and have millions of inhabitants. A newly found monetary union
and a new currency in Europe could be a rival to the "BIG TWO". p> EMU can be self-supporting and so they could survive without trading with
anyone outside the EMU area.
The situation that EMU is in is good as it seems that it can survive on
its own, with or without the help of Japan and USA
6. Prevent war. p> The EMU is, and will be a political project. It's founding is a step
towards European integration, to prevent war in the union. It's a well
known fact that countries who trade effectively together don't wage war on
each other and if EMU means more happy trade, then this means, peace
throughout Europe and beyond (we hope).
Increased Trade and reduced costs to firms.
Proponents of the move argue that it brings considerable economic trade
through the wiping out of exchange rate fluctuations, but as well as this
it helps to lower costs to industry because companies will not have to buy
foreign exchange for use within the EU. For them, EU represents the
completion of the Single European Market. It is vital if Europe is to
compete with the other large trading blocs of the Far East and North
America.
The Political agenda.
There is also a political agenda to European bank (the European System of
Central Banks-ESCB), the complete removal of national control over
monetary policy and the partial removal of control over fiscal policy. p> Individual nation states will lose sovereignty (ie the ability to
control their own affairs). It will be a considerable step down the road
towards political union. br/>
Inflation
From the mid-1980s onwards, there were a number of economists and
politicians who argued that, for the UK at least, EMU provided the best
way forward to achieve low inflation rates throughout the EU. During the
first half of the 1980s high inflation countries, such as France and Italy
were forced to adopt policies which reduced their inflation rates to
something approximating the German inflation rates to something
approximating the German inflation rate. If they had not done this, the
franc and the lira would have had to be periodically devalued, negating
the fixed exchange rate advantages of the system. Effectively, the German
central bank, the Bundesbank, set inflation targets and therefore monetary
targets for the rest of the EU. <В
In order to express whether EU has positive or negative points, we have to take in consideration both advantages and disadvantages of EU and it also depends upon point of view you are considering because of good and bad sides of integration. Behind Economic Integration there is logic to unite politically since EU wants to achieve Political Union we have to consider two sides of coin. And in this case I can say that Economic integration has both negative and positive sides. According to my opinion the union of EU is good because they strengthening economy and cooperate with each other. At the same time it is not good because each member states lose not only sovereignty but also some other matters which belong on...
