In February 2012, we witnessed a ‘historic agreement’ — a second Greek bailout (of €130 billion), as well as a big part of the Greek government’s debt being cut. At the time, many academics and policy think-tanks voiced the opinion that Greece may be better off exiting the eurozone and regaining control of its national currency. In fact, the debt crisis in the eurozone has given rise to a general debate on the advantages and disadvantages of a monetary union membership.
This debate is not new. In the years leading up to the creation of the European Economic and Monetary Union (EMU), there was a heated debate on the pros and cons of a country entering a monetary union. This is still relevant for the UK. Let us consider the basic economic arguments in favour of entering the EMU.
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