The Euro

1. Contents

2. Executive summary 2

3. Terms of Reference 2

3.1. Scope 2

3.2. limitations 2

3.3. Intended Audience 2

4. Methodology / Procedures 2

4.1. Research 2

4.1.1. How the information was collected? 2

4.1.2. Where the information was collected from? 2

4.1.3. What quantity of information has been collected? 2

5. Finding / Analysis 3

5.1. Exchange rates 3

5.2. Members 3

5.2.1. Convergence Criterion 3

5.3. The Five Tests 4

5.4. Euro Timetable 4

5.5. Economic Arguments against joining the euro 4

5.5.1. Risk of deflation and higher unemployment 4

5.5.2. Euro not an optimal currency zone 4

5.5.3. Loss of monetary policy autonomy 5

5.5.4. Demand for European Fiscal Transfers 5

5.6. Political Arguments against joining the Euro. 5

5.6.1. Euro-zoning 5

5.6.2. United States of Europe 5

5.6.3. Political Power 6

5.6.4. Health Service 6

5.7. Economic Arguments For Joining the Euro 6

5.7.1. Lower transactions costs 6

5.7.2. Increased trade and investment 6

5.7.3. Lower inflation and long term interest rates 6

5.8. Political Arguments For Joining The Euro 6

5.8.1. Integration 6

5.8.2. Retention Of Independence 7

5.8.3. Political Power Zone 7

5.8.4. Improve Public Services Sector 7

6. Conclusions 7

7. Recommendations 7

8. References 7

8.1. Text 7

8.2. Newspapers 8

8.3. Electronic 8

9. Bibliography 8

10. Glossary 8

2. Executive summary

The euro is the single currency which has replaced Italian liras, French francs, German marks as well as the currencies of the other nine countries of the EU that have decided to join this currency project with the exception of Britain, Sweden, Denmark, and Greece. On January 1 1999 these currencies were fixed in value against one another and made units of the euro. These countries are the first participants in the new Economic and Monetary Union (EMU).

3. Terms of Reference

3.1. Scope

The following assignment will highlight the unbiased arguments both for and against Britain joining the Euro. Many people have concerns about Britain joining the Euro but in reality when something of this size is to happen it's natural that there shall be worries, and the Euro is certainly no exception. All too often though in the Euro debate has been presented by both pro Europeans and Euro sceptics as a clear cut argument both claiming that there are no arguments against their point of view. In reality the debate is hugely complex. It all comes down to economics and politics. But it's also about Britain's place in the world and what it is to be a nation state.

3.2. limitations

The Report is intended to be between 3000 and 4000 words in total. Restrictions are also in place with regard to the over all layout and presentation of the report, where conforming to styles, spacing and indexing. With a submission date of 5th December 2003.

3.3. Intended Audience

The Report is intended for the viewing of Diane Cook module leader and assessor of BABS level one Skills for Business at the Isle of Man Business School.

4. Methodology / Procedures

4.1. Research

4.1.1. How the information was collected?

The Three main information sources used in the production of this report were text, newspapers & journals and electronic sources. The proved to be valuable sources and gave a clear outline of the whole euro debate.

4.1.2. Where the information was collected from?

Text information was collected from various books obtained from both the IBS library and the college library. Newspapers and journals were obtained from online sources which gave up to date figures on figures and statistics, online sources from websites of both pro European and Euro Sceptics.

4.1.3. What quantity of information has been collected?

As various Sources were used to get my information a large quantity of information was gathered.

5. Finding / Analysis

5.1. Exchange rates

The exchange rates that the countries were fixed are listed below.

Currency 1 euro =

Austrian Schilling 13.7603

Belgian Franc 40.3399

Deutsche Mark 1.95583

Dutch Guilder 2.20371

Finnish Marka 5.94573

French Franc 6.55957

Greek Drachma 340.750

Irish Punt 0.787564

Italian Lira 1936.27

Luxembourg Franc 40.3399

Portuguese Escudo 200.482