Title: Benefits of the Euro - Economics Help
Headings: Benefits of the Euro
Benefits of the Euro
1. Lower transaction costs
2. Price transparency
3. Eliminating exchange rate uncertainty
4. Improved trade
4. Improvement in inflation performance
5. Low-interest rates
6. Inward investment
7. Benefits to the financial sector
Related

Content: The ECB state exports and imports of goods within the euro area rose from about 27% of GDP in 1999 to around 32% in 2006
4. Improvement in inflation performance
The ECB which sets interest rates for the whole Eurozone area will be committed to keeping inflation low; countries with traditionally high inflation should benefit from this greater inflationary discipline. EU inflation has been low. However this point is debatable as countries outside the Euro have maintained low inflation, and arguably the ECB have concentrated too much on low inflation to the detriment of growth and unemployment. 5. Low-interest rates
It was hoped membership of the Euro would help reduce bond yields as there was greater security belonging to a stronger currency. Initially, this occurred with bond yields in Greece, Spain and Ireland converging on German bond yields. But the credit crisis of 2008-12, saw Euro bond yield rise to record levels, suggesting that the Euro could be very destabilising for interest rates. ( EU bond yields)
6.