What are the advantages and disadvantages of the euro system? Explain.

Expert Answers

An illustration of the letter 'A' in a speech bubbles

The euro system has created a large zone within Europe in which various countries all share the same currency.  This single currency system has one major advantage, as well as one major disadvantage.

The major advantage of having a single currency is that it makes trade between countries much easier.  It does this in a number of ways.  Companies that want to trade within the euro zone do not have to exchange currency in order to do so.  This reduces the cost of buying and selling across national borders.  People and companies who want to shop can do so much more easily because they know what the prices offered by suppliers in various countries mean.  Imagine if you are a car manufacturer and you want to compare the price of parts made by suppliers in five different countries.  This requires you to calculate exchange rates, which takes time and therefore costs more money.  With a single...

(The entire section contains 464 words.)

Unlock This Answer Now

Start your 48-hour free trial to unlock this answer and thousands more. Enjoy eNotes ad-free and cancel anytime.

Start your 48-Hour Free Trial
Approved by eNotes Editorial Team