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A currency union (also known as monetary union) is an intergovernmental agreement that involves two or more states sharing the same currency. These states may not necessarily have any further integration (such as an economic and monetary union, which would have, in addition, a customs union and a single market).
Lower transaction costs, elimination of exchange rate fluctuations, and price transparency will give incentive for firms to expand their markets within the single currency area. This would also generate investment and employment. A more stable currency.
Benefits worldwide The scale of the single currency and the euro area also brings new opportunities in the global economy. A single currency makes the euro area an attractive region for third countries to do business, thus promoting trade and investment.
If a common currency, with flexible exchange rate, had been in use, it would take the place and the importance of money in a national economy. In international trade, it would eliminate all the encumbrances of multiple currencies, transaction costs and the vexing issues of triangular currency convertibility.
It can take steps to deflate its currency, making it cheaper, and therefore make its exports more appealing to other countries. With only one global currency, no one country could take these steps, and therefore all countries lose these vital tools in controlling their own economies.
Common Currency. A shared currency that is used by different geographic or political groups. The Euro is a common currency of nations in the European Union, and the United States dollar serves as a common currency for many regions of the world.
Euro. The euro is the result of the European Union's project for economic and monetary union which came fully into being on 1 January 2002 and it is now the currency used by the majority of European Union's member states, with all but two bound to adopt it.
Meaning of single currency in English a unit of money that is used by more than one country: The Euro is the single currency of some of the countries of the European Union.
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