Eu Adapt Common Currency

1)    Why did EU member ultimately adapt common currency? Why did some member did not adopt? Especially the UK?

-    In the year 1999, 11 of the 15 European Union adopted the common currency Euro. 4 member of the countries  of the European Union which include Demark, Greece , Sweden and the United Kingdom did not adopt. However, Greece adopts the Euro in 2001. The United Kingdom uses pound steering as the national currency. The European Union adopt Euro as their common currency because there is some benefit such as removing the fluctuating exchange rate  It is also easier for companies to manage cross-border trade and make the economy stable.  to When the euro was set as the main currency for the European Union, Tony Blair the prime minister of United Kingdom declare the five economic tests that must be met for his country to accept euro.  Gordon brown who is credited with creating the five test policy between the United Kingdom and Euro. The first of the five test policy state that the business cycle and economy structure must be equalized enough so that the United Kingdom could live with Euro interest rate. Besides, the system must have enough flexibility to handle the economic problem. In addition, adopt Euro must contribute to the firms and individual who invest in the UK. Next, the Euro must remain in a competitive position internationally. Lastly, adopt Euro must have higher growth, stable and long-term increase in the job. The British government does not want to relinquish which occur under the Euro system. The Euro system will also remove the level of comfort with the changing of the rate in steering pound. For instance, a British firm who change from pound steering to dollar. In addition, United Kingdom will be forced to fulfil the euro convergence of Euro before adopting Euro which in uphold debt to GDP ratio.

 Reference

1. http://www.investopedia.com/ask/answers/100314/why-doesnt-england-use-euro.asp
2. http://europa.eu/about-eu/basic-information/money/euro/index_en.htm