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Topic 9: Economic (Monetary policy and Fiscal policy (Fiscal policy:…

- - - - Disadvantages:
        
        The main disadvantages was that some industries were ill prepared for EMU (European Monetary Union), and owing to this factor was on the verge of collapsing the whole system.
        
        The main disadvantage is that with a single currency, national government lost a very important monetary policy tool of deflating the currency in times when the economy is slowing down. it is apparent that a single generic monetary policy is inadequate when applied to so many divergent states, and this in itself is the main malady faced by Mr. Mario Draghi the chairman of the European Central bank
      - Benefits:
        
        The benefits of the economic and monetary Union meant the limitation of transaction costs and the removal of exchange rate uncertainty in intra-EU trade.
        
        It offered lower and homogeneous interest rates across the bloc and the development of a price. Transparent regime for consumers to be able to compare across boarder. It also removed to option for Gov to use devaluation for competitive purpose between EU states.
        
        A new international currency to represent the EU's combined economic weight was born into global currency market.