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Benefits and challenges of the euro – opinion article by Adam Kerényi

Benefits and challenges of the euro

Adam Kerényi

Introduction

In this opinion we aim to weigh the actual benefits and potential challenges of the euro as a common currency for 20 European Union (EU) countries. First of all, a single currency offers many advantages: it makes it easier for companies to conduct cross-border trade, the economy becomes more stable, and consumers have more choices and opportunities. However, a variety of political and economic obstacles barred the way for an EU single currency: weak political commitment, divisions over economic priorities, and turbulences on international markets. These developments led to a frustrating progress towards the Economic and Monetary Union. All the EU member states are in principle obliged to introduce the euro once they fulfil the convergence criteria. The EU countries that have not negotiated a currency opt-out clause are Poland, the Czech Republic, Hungary, Romania and Sweden (Hampl, 2023). The only exception is Denmark, which has an ‘opt-out clause’ in the EU treaties, exempting the country from the obligation to adopt the euro. Denmark may nevertheless apply for membership of the Euro area, if it decides so.

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