Title: Single Currency: Pros a& Cons
Headings: Advantages and Disadvantages of a Single Currency.
Advantages and Disadvantages of a Single Currency.
Content: When one nation devalues its currency it actually force others to devalue their respective currencies as not to lose to unfair competition from the first nation that devalues its currency. This kind of devaluation is unhealty to the economic health of all nation states in EU. In the European Monetary System (EMS), currencies of members are fixed within a band of 2.25 % of the central parity. This system is still in operation and the central parity is now the Euro. Devaluation by any member within this system would encourage speculators to attack the currency and/or other currencies within the system because the credibility of EMS depends on maintainig the band. This speculation would fulfill its own prophecy and the currency would devalue further. Click here for a brief history of attacks on the EMS in 1992/93. Lower interest rates because Euro enjoy monetary stability of the European Central Bank (ECB) and the absence of premium due to elimination of exchange rate flucutations. More information about the Euro at http://www.ecb.europa.eu/euro/html/index.en.html