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8/7/2019 Eco presentation FUSION

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ADVANTAGES OF THEADVANTAGES OF THEEUEU



Contents

Transaction costsPrice transparencyTradeWar Political agendaBig Two

SummaryCredits



Transaction costs will be eliminated

For instance, UK firms currently spend about £1.5 billion a year buying and selling foreign currencies to do business in the EU.

With the EMU this is eliminated, so increasing profitability of EU

firms.



Price transparencyEU firms and households often find it difficult to

accurately compare the prices of goods,services and resources across the EU becauseof the distorting effects of exchange rate

differences. This discourages trade. According toeconomic theory, prices should act as amechanism to allocate resources in an optimal

way, so as to improve economic efficiency.There is a far greater chance of this happeningacross an area where E.M.U exists.

Nothing to dowith invisible

coins!



Increased trade and reduced cost to firms

The EU brings considerable economic tradethrough the wiping out of exchange ratefluctuations, but as well as this it helps tolower costs to industry because companieswill not have to buy foreign exchange for use within the EU.

For them, EU represents the completion of the Single European Market. It is vital if

Europe is to compete with the other largetrading blocs of the Far East and the USA



Prevents war

The EMU is, and will be a politicalproject. It's founding is a step towardsEuropean integration, to prevent war in

the union.It's a well known fact that countries whotrade effectively together don't wagewar on each other and if EMU means

more happy trade, then this means,peace throughout Europe and beyond .



Political agendaThere is also a political agenda to European bank

(the European System of Central Banks-ESCB), the complete removal of nationalcontrol over monetary policy and the partial

removal of control over fiscal policy.There are many in the EU who favour economicand political union and they are very much infavour of EMU. There are also many whowish to keep national sovereignty and are

struggling to prevent EMU, whatever itsmerits might be, from going ahead.



Rivals of the Big TwoIf we look out in the world today we can see strong

currencies such as the Japanese Yen and The American$.

America and Japan both have strong economies and havemillions of inhabitants. A newly found monetary union

and a new currency in Europe could be a rival to the"BIG TWO".EMU can be self-supporting and so they could survive

without trading with anyone outside the EMU area.This fact makes the Euro very strong already.The situation that EMU is in is good as it seems that itcan survive on its own, with or without the help of Japan and U.S.A.



Summary for why we shouldremain in the EU

Good for tourists as they won’t have to exchangecurrencies, good for young holiday makers

All prices the same, so no need to spend agescomparing prices in order to find best deals

More wary of investing in other countries – less of arisk More effective and efficiency within trade betweencountries

If we join the EU, UK’s strong economy could helpbuild the Euro to be the strongest currency in theworld amongst other rivals such as the US $ and theJapanese Yen.



ContinuedUK gets to join strong economies such as Germany and FranceMore peace between countries and more backup for when

neededMore trade and decreased import prices and increased exports

Removal of control over monetary policy and partial removal of fiscal policy, Governments will not be making decision justfor their own country but for the whole of the EU

Inflation rates will stay low and therefore there is more spendingas people are left with more of their disposable income so aremore willing to spend, this causes economic growth, thismeans that businesses do well and then start to invest morewith their extra money.



Made and compiled by



Victor Wong&

Sherry Hasan



Researched and read by

Anand Parmar



Read by

Pirathepan Navendan

Aran Wignakumar

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