Human beings dimensions
The world today is very competitive in all arenas of human beings dimensions. These dimensions which are political, social and economical are so dynamic and need to be updated inaccordance with the level of competitiveness in the society. In this sense, originates the many business acquisitions and mergers seen in the corporate scene today. In matters that relates to countries there are emergence and formation of economic blocks. Therefore this economic integration has been dominant in the current world.
But the question is to be addressed is the viability and sustainability. Hence in all EMUs the core issue is usually the single currency adoption. Therefore in this dissertation shall examine the viability of UK abolishing its sterling pound in favour of euro. Introduction In economic environment EMU (Economic and Monetary Union) usually refers to the process whereby countries or members of an integrated economic block, abandons and abolishing their currency and economical transaction policies to adopt a single currency and common economical policies (Seaton 2002).
In this connection EMU applies in the sense that, member countries of the European Union community abolishes and abandons their individual currencies and adopts euro as their single currency for their all economical transactions (Seaton 2002). Therefore in this connection, the European nations once they adapt euro as their single currency it shall be controlled European Central Bank. Which is based at Frankfurt and national’s central banks will serve as administrative agents for the European Central Bank.
Thus in this regard, the process of adapting the euro as a single currency is irrevocable since is contained in the treaty signed by member countries (Leeming 2003). Bearing this in this argument, the fundamental issue is only to consider and evaluate the viability and sustainability of nation’s economy once it abolishes its own national currency in favour for euro. In order to examine the nation’s economical sustainability once it adapts euro as its currency there are a number of factors and determinants to look at firs.
Without examining those determinants then the sustainability of the EMU shall be in anarchy and likely to fall a part. This is because the economical integration is not based on the political union. Hence this calls for the thorough assessment for the entire benefits of euro to an individual nation. In fact in the EMU of European Union there is no sound, (Leeming 2003) good and substantial economical based reason for the integration and introduction of single currency. But rather the whole European community ideologies are based upon primarily political objectives and reasons.
This is in the sense that through forming a merger of European countries, it shall result to a political super state which has been the political elites of the Europe since the end of the First and Second World War eras (Benson 2006). In contrast United Kingdom has tried to hide this objective that it was meant for economic based goals. Hence the big question today is whether the Great Britain shall successfully abolish the pound in favour of euro. Hence to get the viability of the euro to Britain’s economy, there are many issues to consider both economical and non-economical.
Such issues include; thorough assessment of the benefits and what they cover. Benefits to the public, business and political ones. Then from there, what are limitations or cons. The comparative and competitive advantages of adopting the euro or not adopting the euro (Joseph 1997). Other issues to consider are the employment for Britons, foreign countries investment effect, EU impact on Britain if it does not transact using euro, interest rates, Britain membership position in the EU and its sustenance of its influence globally (Erlandsson 2005).
All these issues must be weighed against own currency. Additionally, Britain policy makers should learn or benchmark from past EMUs to come up with a better policy. It is a point of worthy looking at the kind and nature of assessment that is required to enhance policy makers to conform to the use of euro. The assessment of the euro benefits to UK The proper functioning EMU thorough assessment is necessary and vital. This assessment is the key to proper economical planning that shall enhance effective and efficient management to harness maximum benefits from European Union community.
For an effective assessment should include the vital components that are connected with economic drivers rather than politically driven opinions. These components that are necessary for giving insight to whether adapting single currency is a viable option should encompass the following. First and foremost is the aspect of the EU integration having met all necessities that are required for it to have a single currency. These necessities should be globally acceptable (Lye, Keith 1999) by the economists rather than opinion shapers in the political arena.
Secondly, the assessment should cover the aspect of benchmarking with other states that have tried to adapt to single current in the past economical integrations. For instance the Caribbean federations, Latin Union, East African and Central. The importance of revisiting these historical undertakings in the economical environment in the globe is the fact that UK learns the elements that contributed to their failure or any success that was evident. In that case if there was any success or failure UK gets to learn and strategize on how to perform better once adopts the euro.
Thirdly, for an effective assessment should have the component that give the cost effectiveness of having the single current against any possibility of loosing in the long run. The forth factor should be the projection of benefits of the euro in its capability to improve and advance the economy of UK. This should be inclusive of the all Britons likelihood of benefiting in terms of employment, business opportunities and investment growth. The fifth issue must touch on the risks of adopting euro. This must be approached in terms of the projects benefit shall put off the risks involved (Lye, Keith 1999).
These five core components are fundamental for the successful planning for the Britain to decide as to whether to join discard pound in favour of euro. However the outstanding issue is not the content or what should be assessed in relation to adapting euro for Britain, but rather if such assessment have been ever done by the European Union itself or the Great Britain. The reason for lack of such vital perhaps is best known to the key political players rather than economists in the Europe today. This leaves a big challenge to ask as to whether why such important assessment has not been done, yet EU wishes to commence to have a single currency.
is it not worthy to ponder? Therefore it is important to project into the future before blindly falling into it without prior knowledge. Hence risk assessment and management in addition to project management tools of design should be embraced effectively, efficiently and competently to avoid any unnecessary derail in the UK future eco0nomic performance and socio-economical aspects (Lungwort 2002). The pros of euro to Britain The benefits of euro to Britain within EU can be looked at in the following dimensions like political benefits, benefits to business and benefits to the entire public.
In this regard, first and foremost adoption of euro by the UK, it will have an advantage towards cost reduction in changing money from sterling pound to other currencies within the euro zone. This cost reduction in money changing accounts to lees than 0. 5 percent (Lungwort 2002) of the European Union income aggregate. In this connection the exchange cost reduction works out the equation to offset the cost of euro introduction to the EU zone. Thus in this whole changeover amounts to 3 percent of national income aggregate of EU.
This would take some time which is estimated to be at least 6 years as a pay back period in order to recover (Mifflin 2002). In the turn of events this may cost EU region economic recession, render uncompetitiveness and higher rate of unemployment. These exchange cost reduction in transacting across euro zone is like attractive bait for adapting euro. This is so especially to the business scenario and tourism sectors, which have short lived benefits in contrast to the damage that results from monetary union limitations thereafter in enormous job loses and business closure (Joe 1990).
Euro to Business advantages The greatest merit to the business world is the reduction of the cost of exchange rates within the euro zone. Additionally, this reduction to business persons and removal of exchange rate for companies which wishes to export goods and services to Europe and the European Union zone are two major advantage of adapting euro for Britain. In export scenario the management of exchange rates is usually the main challenge faced by the exporters (Rawlace 1995). But this waiver is only dependant on the economic performance and progress of their own countries.
In this view, the most beneficial businesses are in the category of the large scale like multi-national corporations, which have large volume of transactions costs and transact in bulky within Europe environment (Kali 2005). In that regard, it is seen as a way used by these large scale corporations to free themselves from these burdening costs that have a bearing on their profit margin. Hence in this perspective domestic and small scale operators have very little to gain in the waiver in relation to joining euro. Empirically in Britain today over 80 percent of businesses are domestic producers (Marvin 1997).
Hence under this case as depicted in the economical terms, most businesses in UK are not likely to gain much from the business merit clause as stipulated by EU. Therefore any agitation for ditching pound in favour euro from the business community side is based on the individual interests and reasons rather than business or economically oriented ones. In fact is a point of worth to point out that UK has performed and progressed better since it dropped European Exchange Rage Mechanism, (Lether 2000) than those European nations that used Maastricht convergence while preparing for the Economic and Monetary Union since the year 1992.
This fact nullifies ideology of clinging for euro that would increase the business based opportunities and economic growth. Although that is not to say that there is totally no good in euro to UK, but the goodness is a little bit at a low level or minimal that cannot seem to benefit the Britain much economically. Hence UK should weigh carefully in order to take decision for or against euro in relation to economical or business advantage (Rawlace 1995).Sample Essay of EduBirdie.com