Salary 11 Advantages and Disadvantages of the European Union The European Union, also known as just the EU, is a union of 28 countries that work together in political and economic matters. The majority of the union member countries are located in Europe with a handful located in Russia. They do things like sent lending rates for banks, and combat any inflation problems that may arise.
This article discusses the advantages of not using the euro in the EU.
All other EU countries must adopt the euro once they meet certain criteria. EU nations that do not use the euro gain certain benefits, especially in independence in monetary policy and decision making. Below, we discuss the benefits of not adopting the euro in the EU.
In the last year, non-euro EU currencies have generally performed better than the euro. On the other hand, the United Kingdom, which is an EU member nation but never adopted the euro, was able to devalue its currency quickly in response to the financial crisis.
Its economy bounced back more quickly than some other EU countries. Startingas the United Kingdom faced the global financial crisis, it was able to cut interest rates quickly to encourage investment and spending in the country.
In contrast with the UK, the European Central Bank did not initiate its own quantitative easing program until March ofa full 7 years after the financial crisis. There are countries whose economies are relatively more sensitive to interest rate changes.
The UK is able to manage interest rates effectively for its own economy through the Bank of England.
Eurozone nations cannot control their own interest rates as they are bound by the mandates of the European Central Bank. Like the UK, Spain and Greece also have high sensitivity to interest rates, but have not been able to manipulate interest rates for their economies.
Lender of Last Resort: The reason for such unwanted developments is that European Central Bank usually does not buy government bonds if there is a temporary liquidity shortage.
Ease of Dealing with Inflationary Pressures: Problems with the Euro or Problems with a Common Currency? The one-currency-fits-all concept with a common interest rate and common monetary policy across a large and diversified region of Europe has been a challenge. The European Union has territorial, cultural, and language barriers, which makes relocation difficult for individuals and businesses.
At the same time, operating under a common monetary policy also meant that individual countries were not able to respond to very different economic situations. The nature of a union means that common decisions may sometimes be more favorable to some nations and less favorable to others.
The Bottom Line The adoption of the euro introduced many advantages including price transparency and stability, a single financial market, the elimination of exchange rate fees and problems, and increased ease of travel and business. However, the economic challenges stemming from the financial crisis have led to doubts about the long-term existence of the euro.
European Union countries, like the UK, that did not adopt the euro and were able to set their own monetary policies, appeared to fair better after the financial crisis than some eurozone countries.
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Delivered twice a week, straight to your inbox.Benefits in Europe: country by country The Telegraph details the benefits a year-old EU migrant could access in each member state The European Commission’s report into migrants and benefits comes amid a row between .
You get EU citizenship: Since Poland is a part of the European Union, by confirming your Polish citizenship (EU citizenship) you can obtain your Polish passport (EU passport), which gives you all the benefits that come with having EU citizenship and an EU passport!
Overnight, the eurozone became the largest economic entity in the world. While all eurozone nations are part of the European Union (EU), not all EU nations have chosen to enter the eurozone. This article discusses the advantages of not using the euro in the EU.
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Member countries of the EU are entitled to these benefits and it can be said that it is truly an advantage to be included in the European Union. The Disadvantages If there are benefits to being a member of the EU, there are also disadvantages, and it includes the following.