Economics and Monetary Union

For


Single market requires single currency
Transaction costs eliminated (1/2% of GDP)
Price Transparency
Business Stability / Certainty increase
Interest rates lower if we joined
Possible loss of FDI if we don’t join
Britain needs to pull its weight in Europe – can’t do so without being part of EMU




Against


Erosion of sovereignty
Changeover costs (£3.5billion)
Can’t have one interest rate for such diverse economies
Loss of ability to cope with external shocks
Britain may become uncompetitive due to Europe’s high social costs and inflexible labour markets