Pros and Cons of European currency union Essay Example | Topics and Well Written Essays - 1750 words

Pros and Cons of European currency union - Essay Example One of the biggest advantages of Euro is that it saves a lot of time and effort of the travelers who choose to travel with Europe. For instance if there is a Soccer game in Spain which a Greek citizen wants to witness, he/she can just straight away catch a flight and reach the Soccer stadium in Spain and watch the game. There is no need to covert the currency into some other currency. The same has resulted in saving a lot of time and effort of the European Citizens. This was not the case prior to the introduction of Euro. The people had to exchange money every now and then to meet their demands but after the introduction things have changed for better. The introduction of Euro has brought in many significant changes in the European Economy. The most noticeable of them all is the economic integrity brought by the introduction of the Euro. The positive effects are not restricted to economy but they also positively influence the political climate in the European countries. This paper will throw light upon the benefits and the problems of the European single currency, which is Euro. In addition to this the paper will also focus upon the affect on other currencies by the present rise in the value of the Euro. "Having a single currency and an economic and monetary union strengthens Europe's role in international fora and organizations like the International Monetary Fund, World Bank, and Organization for Economic Co-operation and Development." (The Euro & You). Euro strengthens the position of all the European countries, having a single currency helps a lot in the growth of the country and in this particular case Europe on the whole. Euro is very frequently used in international trade; it has very quickly become a part and parcel of the lives of many businessmen who carry out trade at large scales. Countries also have started using Euro as the currency for International trade. "A single currency makes Europe a strong partner to trade with and facilitates access to a genuine single market for foreign companies, who will benefit from lower costs of doing business in Europe." (The Euro & You). Another major advantage is the clarity in prices whenever an European citizen travels to another European country it becomes very easy to compare and buy the products of his/her choice; this facility was not available to the citizens prior to the launch of the Euro. Earlier even if a Tourist wanted to buy a product desperately, he/she was made to think thrice about it because of the different currencies within Europe but these days there is transparency in prices with regard to the currencies and this has only happened because of the introduction of the Euro. Euro has brought in a lot of Economic and financial stability, a Businessman is much less prone to risk when using Euro as his/her currency. Single currency keeps the inflation rate under a good check, which is extremely important for an economy and the Euro does exactly that. It keeps interest rates and the rate of inflation under check hence it can be said that the Euro plays a pivotal role in maintaining the economic growth of the European nations. Problems of the European Single Currency The biggest disadvantage is that it increases the financial cost of an institution in getting adjusted to the new currency. The