isitors to Europe travel via the Eurorail, and visiting conversion stands becomes a hassle as well as the charges associated with it.Disadvantages for European BusinessDo the gains from reduced transaction costs, the disappearance of exchange rate instability, and greater price transparency outweigh the losses from the cost of introducing the new currency and possible macroeconomic adjustment costs? Following are a list of disadvantages, which refute the statement just made favoring the advantages greatly. Accounting, logistics, and reporting systems will simplify operation, which provides an advantage in the long run, but a disadvantage first because there are thousands of information software systems, which have to be adapted to the new currency. Clearly the costs associated with conversion, which have been and will continue to be incurred, are substantial. Some multinational companies must have systems handling both denominations until the changeover is complete. For instance in Europe, all cash and credit card transactions in restaurants, retail establishments, as well as railroads, airlines, and bus companies need to be able to handle transactions in both domestic currencies and the new Euro-currency. The loss of autonomy through joint national policies has harmonized participating members with common objectives. The European currency will strengthen Europes identity as a whole. Under these new arrangements, member countries give up that part of their national sovereignty that relates to monetary policy. In effect, individual countries no longer have the option to pursue an independent national monetary policy. Individual domestic government will no longer be able to increase the money supply to drive down interest rates and stimulate investment. Nor will they be able to devalue their currency so exports will grow. Cross-boarder competition is more intense through ease of investment and the transparent currency. Competition is ...
