Title: Pros and Cons of the Euro
Headings: Pros and Cons of the Euro
Pros and Cons of the Euro
Key Takeaways
Pros
Promoting Trade
Encouraging Investment
Mutual Support
Cons
Rigid Monetary Policy
Possible Bias in Favor of Germany

Content: Initially, there was not enough collective action. Even worse, many nations closed their borders to each other. However, the European Central Bank consistently bought up enough debt in afflicted countries, especially Italy, to keep interest rates relatively low. More importantly, France and Germany supported a recovery fund worth over 500 billion euros. Cons
Rigid Monetary Policy
By far, the largest drawback of the euro is a single monetary policy that often does not fit local economic conditions. It is common for parts of the EU to be prospering, with high growth and low unemployment. In contrast, others suffer from prolonged economic downturns and high unemployment. The classic Keynesian solutions for these problems are entirely different. The high growth country ought to have high interest rates to prevent inflation, overheating, and an eventual economic crash. The low growth country should lower interest rates to stimulate borrowing.