Which can be used to raise living standards and employment. Central banks would find that they no

Longer needed to keep so much foreign exchange.

Reduced exchange rate uncertainty

The daily changes in exchange rates, witnessed on the foreign exchange rate markets, introduces

An element of risk and uncertainty to trade between nations.

Businesses “hedge” against exchange rate risks by purchasing a range of financial instalments

Like futures, options and swaps.

Price transparency

Once Euro notes and coins are introduced, all prices in “Euroland” will be expressed in the

Same currency. Consumers and firms will then be able to compare prices throughout the Euro-area

And source the lowest cost supplies.

Lower interest rates

This, of course, ought to stimulate investment, resulting in greater economic growth and higher

Living standards.

Lower inflation

Governments are prone to manipulate monetary policy for their own short-term advantage. The

Result, however, is generally higher inflation. With a single currency, issued by the European Central

Bank (ECB), the power of any member state to expand the growth of the money supply is necessarily

Constrained. Since the ECB is also independent of political control, acting with an explicit antiinflation

Objective, political interference is eliminated and inflation should be lower.