s are withdrawn from the economy forever! From this date forward the euro-zone will only operate in one single currency the euro. EFFECTS OF THE EUROEUROPEAN BUSINESS AND THE EUROWhile the U.S. must adapt to the introduction of the Euro, our adjustment, of course, is minor in comparison to the changes and challenges facing EMU member states. They will be relinquishing monetary policy to the European Central Bank (ECB). The ECB, in turn, must implement a credible single monetary policy throughout the Euro region. In order for EMU to succeed and for the member countries to profit from sustained economic growth, progress is needed on structural reforms, particularly in labor markets. The advent of EMU will make it more rather than less vital for governments to proceed with these reforms. Given a shock to domestic demand, individual members of EMU will no longer have any freedom to respond by adjusting their exchange or interest rates. As a result of the euros implementation, it has presented both advantages and disadvantages for European Businesses integrated in the EMU. Advantages for European BusinessThe euro is not 'just another foreign currency'. The euro means big changes for business both within these countries and throughout Europe. For example, the euro is likely to: Change the financial landscape by eliminating the currency risk that has led banks and investors to keep most of their money at home. A pan-European small capitalization market will begin to emerge. Investors will have a greater choice of investments outside their borders without currency risk. The large Euro zone will integrate the national financial markets, leading to higher efficiency in the allocation of capital in Europe. Gain support of the single market because economic activities are exposed to equal conditions, countries will begin to live or die together. EU members maintain the convergence criteria, which plans for economic and financial stability of E...
