The Treasury's official assessment of its five economic tests acknowledged that EMU membership for the UK could enhance productivity by increasing trade flows between the UK and other EU nations; boost investment and stimulate competition in product markets. (Artis 2000)
EMU may help UK households with lower prices and higher wages. It may promote supply-side reforms in the EU, aid specialization and enhance the UK's comparative advantage in a host of industries over time. Britain's excellent labor market would be highly effective inside a single currency area, yielding increased investment from outside the EU. Britain has been a major recipient of foreign direct investment in recent years. By removing a money-obstacle and improving access to funding, EMU could also facilitate the development of UK-owned multinational enterprises.
Membership of the euro will assist consumers and businesses with price-comparison among EU countries, encourage cross-border trade and increase free-market pressures.
By contrast, here are some of the macroeconomic arguments put forward against membership:
Currency unions have collapsed in the past. There is no guarantee that EMU will be a success. What are the key lessons emerging from Greece's experience?
The Mundell-Fleming model has been used to argue that an economy cannot simultaneously maintain a fixed exchange rate, free capital movement, and an independent monetary policy.
It is quite possible that the monetary union will not be sustainable; so countries that discover themselves to be in difficulty may cancel their membership and re-establish an independent currency and an inflationary monetary policy. (Example: Ireland's departure from the sterling currency area suggests that leaving a currency union is beneficial, rather than joining one.) (O'Beirne 1999)
Companies are shedding fewer employees after many of them had achieved better-than-expected results in 2009. The British economy benefited from the large amount of spending by the government and the BoE; the fiscal and monetary measures managed to give a boost to the economy and pull it out of recession.
The European Union warned the British government of failing to reduce the deficit by 2015 to the 3% ceiling put by the EU. Nonetheless, Britain's deficit is predicted to reach 12.1% of GDP this fiscal year of 2010-2011 before...
In Germany, the idea that financially conservative Germans might have to contribute to a bailout of a nation that 'cooked its books' has been difficult to sell to the public, and British politicians would have faced even more criticism, had Britons been forced to shed their beloved pound. Great Britain can congratulate itself because it did not throw in its fortunes with the unstable euro, although some Britons protested this
It is administratively aggravated which will only assist European policy makers. Account means a continuing shift of domestic monetary autonomy to the European Central Bank indicating providing elasticity on exchange rates and interim interest rates. Domestic monetary policy would in no case be able to react supplely to exterior economic alarms like the increase in goods price increase. The prospect for lessening local economic problems will be more narrowed
Finally, in terms of innovation, the company strives to align itself to the latest it tendencies. In response to the rapid pace of development imposed by the advancements in Information Technology, Abercrombie & Fitch has launched its website as a means for customers to shop online. The website presents the user with a multitude of features and with the possibility to customize his/her shopping activities. Aside the website however, Abercrombie
The eurozone package is politically more complicated. it's designed to show that 16 nations sharing the euro currency will stand united behind the debts of member nations to stave off a potential crisis of confidence that could damage them all." (Trumbull, 1) This complexity is underscored by the inherently questionable imperatives of the European Monetary Union. Indeed, one of the core challenges of free trade, globalization and the establishment of
" (Risse, 1998) First, the "Euro is about European union rather than just lowering transaction costs" and secondly "intuitionalists arguments about path dependent processes offer significant insights if they are linked to the more constructivist reasoning" which Risse develops in his work. (1998) Third stated is the primary argument is that "the visions about European order which give political meaning to EMU, need to be understood in the framework of
The UK needs to build good economic relationships with emerging markets even more than with its EU neighbors. China is already highly competitive in manufacturing and is gaining competitiveness in high-technology manufacturing. India is a leader in Information Technology and, being an English speaking country, also has the ability to be globally competitive in Professional Services. Latin American and Southeast Asian economies, such as Brazil or Indonesia, will become increasingly
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