Pros and Cons of the formation of Euro Zone
Seventeen different member states have combined and collaborated to form a single economic and monetary union (EMU), called the Euro zone. The Euro zone has been formed in order to align and develop the same monetary and fiscal policies for a set of countries to provide them with some benefits. The union was initiated first in the year 1999 with eleven countries and has grown to seventeen countries now. Though it all looks crème and fancy from the outside, there are actually several advantages and disadvantages of the formation of the zone wherein the countries make use of the same currency as well.
The biggest advantage of having the Euro zone is that the member countries can trade among themselves without having to face the risk of exchange rates. As the countries use the same currency, there is no problem of exchange rate. This not only facilitates trade for these countries but also makes their position stronger in the market by strengthening Euro. The international trade also increases with the adoption of one single currency and attracts more of international investments, thus strengthening the economic situation of the region. In addition to the removal and elimination of the exchange rates, the countries are also exposed to better monetary policies.
The policies for the Euro zone are generally formed by the European Central Bank and it has been observed that some of the member countries benefit more from these common policies as compared to the benefits they would get from their own policies. Better unity among different economies and enhancement of the overall economic strength are also perceived as some of the advantages of the formation of the Euro zone.
But as everything has a dark side to it, the formation of Euro zone also has its own cons. The data and economic figures have demonstrated an increase in the unemployment rates in these countries after joining the union. Not only has the unemployment increases but the countries are also shown to be
The biggest advantage of having the Euro zone is that the member countries can trade among themselves without having to face the risk of exchange rates. As the countries use the same currency, there is no problem of exchange rate. This not only facilitates trade for these countries but also makes their position stronger in the market by strengthening Euro. The international trade also increases with the adoption of one single currency and attracts more of international investments, thus strengthening the economic situation of the region. In addition to the removal and elimination of the exchange rates, the countries are also exposed to better monetary policies.
The policies for the Euro zone are generally formed by the European Central Bank and it has been observed that some of the member countries benefit more from these common policies as compared to the benefits they would get from their own policies. Better unity among different economies and enhancement of the overall economic strength are also perceived as some of the advantages of the formation of the Euro zone.
But as everything has a dark side to it, the formation of Euro zone also has its own cons. The data and economic figures have demonstrated an increase in the unemployment rates in these countries after joining the union. Not only has the unemployment increases but the countries are also shown to be