preview

What Are The Pros And Cons Of Joining The Euro

Good Essays
A global common currency was first proposed by John Maynard Keynes, in which a single currency could bring new strengths and opportunities arising from the integration and scale of a global economy, making a single market more efficient. With a new common currency, the extra costs, risks, and a lack of transparency in cross border transactions, are eliminated. This hence makes doing international business more cost-effective and less risky, and even help to encourage foreign direct investment (FDI). Nations benefit this way, as a common currency would not suffer from inflation, allowing a provision of stable currency. Also, a singe common currency would cause a sort of levelling of the playing field, where countries can no longer devalue currencies to boost exports.
 Yet, despite the global nature of commerce, a collective management of national economies, and subjecting all countries to one monetary policy, only benefit some at the expense of others. The truth is that economies differ, and require different…show more content…
Although the days of rage have receded, the euro crisis which came along and hampered the economies of the Eurozone showed a very clear message— Joining the Eurozone is no guarantee for success. The euro and its competitive differences, caused some economies to grow, and the others to stumble severely, resulting in two very different social outcomes.
 Yet, it was never the problem of the euro. Throughout the crisis, the euro had been remarkably stable. Instead, it was the people of Greece, Ireland, Portugal, and Spain who understood that it was not the euro that caused their economic difficulties. The problem with euro was the creation of high expectations that having the euro would make countries immune from monetary realities, such as the need to balance budgets, etc. What Greece really needed was to get its fiscal house in order. iii. Country Policy and Possible
Get Access