What are the Potential benefits and costs of UK adopting the euro?

What are the Potential benefits and costs of UK adopting the euro?

Expert Solution

Cost of adopting the Euro- UK has to bear the cost for joining Euro. Interest rates in Euro currency are set by External commercial borrowing (ECB) that are usually at higher side this can lead UK towards the recession. Due to interest rates hike, UK was badly affected in 2008-09 recession.

This time Euro is in strong position and there is no chance of devaluation of Euro, due to its strong position with respect to mother currencies, exports will be costlier and there may be lower economic growth in the country.

Potential benefits of UK adopting the euro- Are as following-

Euro is the second largest currency in the world after US dollar. It is more stablized so it will have lower transaction cost in the Eurozone as the uncertainty in exchange rate will get eliminated.
It will increase revenue from tourism within the Eurozone.
Now prices will be more transparent.
Inflation will come down and Import will be cheaper with the strong Euro currency.

jeff jeffy answered 2 years ago

What are the implications of adopting the Euro for domestic Fiscal policy?

Discuss the concept of IT Service Management. Identify potential benefits that organisations get by adopting ITIL...

Discuss the concept of IT Service Management. Identify potential benefits that organisations get by adopting ITIL based IT Service Management (ITSM). List at least FIVE benefits

. Identify potential benefits and costs of a Hospital in public economics ?

What are the tax benefits of adopting LLC, Partnership and Corporate forms of ownership.

What are the benefits and disadvantages of adopting either the teleological or dentological approach to ethical...

What are the benefits and disadvantages of adopting either the teleological or dentological approach to ethical decision making in the business context?

what do you think are or could be the benefits of adopting Strategic Framework of Information...

what do you think are or could be the benefits of adopting Strategic Framework of Information management at each organizational level responsible for overall productivity and profitability enhancements?

What are the benefits of adopting international accounting standards for (a) investors, and (b) business enterprises?...

What are the benefits of adopting international accounting standards for (a) investors, and (b) business enterprises? What are the potential risks associated with a move toward the adoption of international accounting standards in a nation

Problem 1: a) List the potential costs and benefits that should be considered in evaluating a...

Problem 1: a) List the potential costs and benefits that should be considered in evaluating a potential nuclear power plant. What stakeholder viewpoints will need to be considered? b) If a net present worth analysis for a stream restoration plan indicates that the net present worth (NPW) is greater than zero, does that guarantee that the plan is the best possible (optimal) solution? Why or why not? You may wish to use a graph in your explanation, but do not...

Smart-A-Runners Ltd based in Hatfield UK is considering adopting a track and trace system for their...

Smart-A-Runners Ltd based in Hatfield UK is considering adopting a track and trace system for their supply chain. The company will be using computer simulation to evaluate the benefits of the track and trace system. Briefly discuss how simulation can be used to evaluate the benefits of Smart-A-Runners Ltd’s track and trace system and explain to the company the key issues to consider in their use of simulation.

Discuss the benefits and problems associated with the creation of the Euro.

Question