EU fans - single currency benefits?

Question

If a common currency is such a great thing why didn't the EU just adopt the US Dollar?

Would have saved a fortune on having an european central bank etc.

Answer 1

Because the US currency is run for the benefit of the US. The Euro is run for the benefit of the EU.

Ireland joined the euro in 1999 and has never looked back - there is no logical reason for the UK not to join in, except for misplaced national feeling.

Answer 2

This is because each country wants to maintain its individuality and control of its finances. Currently the Pound and the Euro are higher than the US Dollar, meaning that they wouldn't change now anyway.
As for the UK, yes, there is some bad feeling about the Euro but with good reason. Maintaining the Bank of England has allowed us to rectify crises like the Northern Rock bankruptcy much more efficiently than anywhere else. Also by keeping control interest rates and inflation for the UK only, not the whole of Europe.

Answer 3

Well, that would make lead to certain internal contradictions. For example, what would inflation in one country lead to on a global scale? Even worse, the effects of economic mismanagement in poor countries would be highly amplified on a global scale. For the idea to work, the entire world would have to be one sovereign state. Current industries relying on cheap imports for raw materials would start facing difficulties. Most importantly, on what basis would you decide the value of this currency? We can say that 1$=x Rupees, 1$=y Euros etc. you would have to set an exchange rate mechanism for converting each country's currency into this new currency. Each country would have its own preferences for the new value of this currency. China would want it to be equal or cheaper than the Renminbi. So would the other emerging markets. And so on. Fluctuations in this currency would lead to global effects. In the modern world, countries can guard themselves from crises in other countries' currencies by changing the interest rates, changing money supply etc. In short, having a global currency is as good as having no currency at all: the ultimate result in both cases would be catastrophy.

Answer 4

Why would they most european currencies were doing better than the dollar anyway before the euro was put in place. It works real well. Soon all the oil from opec members will be in the Euro. the dollar will not be worth looking at real soon another four years and it will be 2 dollars for one Euro.

Answer 5

I'm not an EU Fan, but as a frequent traveler, it is quite a benefit. Back in the day just going from Belgium to Germany was a pain, with all the money exchange. The Euro is actually doing better than the dollar, so let's be glad we didn't.

Answer 6

Because nobody is stupid enough anymore to help finance the US deficit.

Iran sells its oil in Euro.

China has an asset which is spread in different currencies

Russia is selling its dollars to buy Euros

Saudi Arabia is asking for more money against oil since the dollar as a reference money is worth less and less

Answer 7

Because Europe is not the US and wanted their own individuality. Would wish to have European financial control.

Answer 8

A good idea, it would have made the green back worth more than the paper it's printed on, like it is now.

Answer 9

Oh yes, and let's surrender to them entirely while we're at it ! At least we have a vote in Europe, and we're shown some respect. Bush treats the UK like his own personal b*tch

Answer 10

interesting answer, the one about Europe not wanting the dollar as it wanted to keep its own individuality, perhaps that's why the UK wants to keep the pound.