uro will be guaranteed by an independent central bank. Countries, members of the Monetary Union will benefit from low interest rates, because the inflation will decrease as well as the risk.The member countries desire price stability, which is possible with lower interest rates and inflation.The growth will be more stable, which will ensure lower interest rates and the investments will increase which will increase growth and so on.The liquidity of the financial markets in euro is expected to become greater, which will lead to lower interest rates.There is already a good example of the statements above. Since 1992, long term interest rates have fallen in Europe by more than 3 % on average and short term interest rates by more than 6 %. The difference in long term interest rates of the major euro currencies has virtually disappeared. There is a concern that replacing one or more currencies by a single currency will increase inflation, as low prices are rounded up. The decimalization in United Kingdom and Ireland did not result in higher prices. The change of the European currencies with the euro should have low effect on inflation or the inflation may even go down because of the competition. It will be easier for producers and consumers to compare prices. This will result in higher competition because consumers could go and purchase a good, where its price is lowest. So, companies, which offer at higher prices will have to decrease them or increase the quality of goods.The introduction of the euro, however, faces some criticism, which in most cases does not prove to be appropriate or connected to the euro. The high rate of unemployment, which exists in most EU states is rather structural than connected to the euro. The macroeconomic stability, which will follow with the implementation of the euro is likely to decrease the unemployment. There is a risk of overvaluating the euro, due to the big optimism, connected to the currency. This mig...
