Current Business Issue

On a trip to the English countryside this summer, my cab driver and I began discussing European politics. He began discussing the fact that the U.K. has not adopted the euro as their currency yet, unlike so many other European nations. So far, 16 out of the 27 members in the European Union have adopted the euro as their currency. The cab driver's take on the issue was that the people of the U.K. would like to adopt the euro as their currency, as the euro is the currency, "with the highest combined value of banknotes and coins in circulation in the world, having surpassed the U.S. dollar".

It soon became apparent why the U.K. has reservations about adopting the euro. By each country being tied to the same currency, if one country's economy is doing poorly, the other countries will begin to suffer as well. This is more apparent than ever with the current Germany vs. Greece controversy.

According to BusinessWeek, Germany is the head of Europe's biggest economy. Germany is now being called upon to ladle out billions of dollars to help save Greece from its large, self-imposed deficit. Germany now finds itself between a rock and a hard place. The German chancellor, Angela Merkel, feels that if Germany bails out Greece, the Greeks will have learned nothing from this experience and will continue to be frivolous spenders. Yet she also knows that, "German companies are more sensitive to the losses they would suffer if Greece and other European nations slipped under."

Sources: http://www.businessweek.com/magazine/content/10_09/b4168024506794_page_5.htm
http://en.wikipedia.org/wiki/Euro