What Are The Disadvantages Of Single Currency

European Union was founded in 1957 with a goal to build a common market. To achieve this goal a close co-operation on economic and fiscal policies between member states is needed. Hence, the Economic and Monetary Union (EMU) was born in order to achieve the single market goal. The coordination in Economic and Monetary Union involves the economic and fiscal policies through a common monetary policy for all member states and a common currency, euro. The European Central Bank (ECB) was created to take care of the monetary policy of the Eurozone and to be the national central banks of the euro area countries.

Ever since 1999, European Union has decided to adopt the use of single currency in their community. The decision to adopt a single currency shows a concrete proof of European Union integration. Out of 28 member states that join European Union, 19 of them have already use euro as their main currency. With the exception of Denmark and United Kingdom that are free from the responsibility to participate in the policy, because they have an ‘opt-out’ clauses in the Maastricht Treaty, several other member states of European Union have not participating in single currency policy because they have yet to meet the condition to adopt this policy. The single currency, euro (symbolized by €), is a signal for European Union member states

From general perspective, the single currency policy offers many advantages, the elimination of fluctuating exchange rates and exchange costs, more choice and stable price for consumers and citizens, improvement of economic stability and growth, a more integrated financial market, and encourage people to travel and shop in other countries. Nevertheless, not every member states can gain these advantages. The euro-skeptic thinks that this policy will not work and may threaten the monetary