European countries came up with a single currency that initially operated in eleven Nations. Later in 2002, European Union member states settled on the Euro as the only currency. However, the introduction of the Euro has always been poor compared to the US dollar and the pound (Ministry of Finance 1). Nevertheless, the Euro has significantly improved and stabilized the economy of Europe.
Before the introduction of the Euro, the European countries were using different currencies a situation that meant that for one to move from one country to another, one had to convert to the country’s currency, which led to loss of money through exchange fee. Initially, the Euro was created to ease travel and international trade (Shigeyuki and Hamori 16). However, it replaced the currencies and was later made the official European currency.
The Euro has brought major advantages in the economy of the European nations. Using a single currency to trade has led to flexibility and stability of the currency, thus making it stronger in the international markets. The single currency has eliminated the exchange rates where one would lose money during the exchange. The Euro has played a significant role in increasing and stabilizing the region’s economic welfare. In addition, there are currencies that were perceived to be more valuable than others, thus leading to devaluation of one currency, but the Euro has eliminated that problem (Ministry of Finance 1). The use of a single currency has encouraged investments across the region, thus creating employment opportunities.
Therefore, in my opinion, the European countries will not benefit if they revert to their previous currencies. Given the advantages, most of the nation will suffer economically, especially when it comes to the exchange market. It would be more beneficial if they continue using a single currency to trade as this will make them competitive in the international markets and stabilize the region’s economy.
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