Title: Benefits Of Single European Currency - Free Coursework from Essay.uk.com
Headings: Benefits of single european currency
Benefits of single european currency
Examine the potential benefits to European manufactures and consumers of single European currency

Content: Businesses, involved in commercial transactions in different member states, would no longer have to face the costs of accounting in different currencies. As the fixed European currency is implemented firms say from the UK would be able to predict accurately the exchange rate of their currency with that of foreign currency this would be beneficial for firms as they would have a clearer idea of when how and where to invest in. Thus the net investment of the EU region would increase and as supply increase due to investment the revenue of firms would increase. On the other hand the increase in investment would increase competition forcing efficient firms to grow and expand into other markets outside the EU such as the US. This would make them more competitive and allowing them a larger chance of surviving under international competition. As markets becomes more contestable firms would try to be more efficiently as firms increase in size thus full economies of scale would be exploited which would be beneficial for natural monopolies. Increase in infrastructure lead by multinational companies as foreign firms invest in the EU they would open up new markets and bring and make new infrastructure thus reducing the setup costs of domestic firms and allowing them to have more profit. As new multinational companies are introduced in the EU domestic firms would benefit as the multinational would train labor, cause the government to reduce interest rates to attract foreign investment. The multinational company would build new roads and infrastructure thus existing firms can exploit and use this infrastructure without paying for it. Consumers will also benefit directly from monetary union.