Overview Of Mcdonalds AND ITS OWN Mission Economics Essay

The founders of this junk food chain were Ray Kroc, Founder of McDonalds Corporation, Jim Skinner, CEO, Michael J. Roberts (President/COO) and Ronald McDonald, Corporate Mascot. Today it is spread across 119 countries with a count of 54 million customers per day. This junk food chain also operated other brands like Aroma Cafe, Boston Market, Chipotle Mexican Grill and Donatos Pizza and McCafe's. By Wikipedia History of McDonald [Web 1]

McDonald's SMART Objectives is to serve good food in an agreeable and fun environment, to McDonalds our customers favorite place and way to consume, to be a socially responsible company and provide good returns to its shareholders. The company aims to provide its customers with food of a higher standard, quick service and affordability.

McDonalds worldwide businesses have been aligned around a worldwide strategy called the program to Win centering on the five basics of a fantastic customer experience -

People, Products, Place, Price and Promotion.

McDonalds is on the top list for creating "cradle to grave" marketing. Attracting kids as young as 12 months old into McDonalds with wonderful meals, toys, and playground this stay in the mind of the children until they grow up into adulthood.

The "Golden Arches" and "Ronald McDonald". These two icons have located a psychological image in the minds of customers for what to look for and where you can go to when they want quality food for a minimal price and fast. In turn these has help the business to convince its customers to stay loyal and keep maintaining a high percentage of market share while working on new strategies to capture emerging markets.

By www. bignerds. com/papers/25234/Mcdonalds/ (assessed 17, 03, 11) [Web 2]

b) Create a comprehensive stakeholder map for your chosen organization. How successful is the organization in understanding their views and meeting their expectations?

A comprehensive stakeholder map for McDonald

McDonald's is well known because of their burgers and meals. They have extended itself all around the world such as the UK, U. S. A, China, India and many more countries.

The diagram above shows a thorough stakeholder map of McDonalds

Each stakeholders are interested in McDonalds for different reasons.

1. Owners or possibly shareholders are those which may have committed to McDonalds and Want to generate profits from the business enterprise. They may be more interested in the company making higher profit in order to get a good dividend and probably get their shares to increase in price.

2. Managers as stakeholders wants McDonalds to succeed because the success will better their chances of promotion, the company may reward them with higher salaries, bonus or better fringe benefits and lastly the failure of McDonalds might cost them losing their job.

3. Workers / Staffs are a fundamental element of McDonalds plus they consider the interest of the business and also want it to succeed because.

Success Failure

More more likely to get better pay

Chance of promotion

Better facilities

Threaten their jobs

Freeze their pay

Possibly cut their wages

4. Suppliers as stakeholders is a simple part as well, they pay attention to the business so they access how the sales of these products are doing. Even if the sales in McDonalds is not doing this well they might keep supplying to make their own money.

5. Customers have a stake in virtually any business which they buy goods and services from and they want low prices, best quality available, Good service, Innovative products and also how healthy the meals are.

6. McDonalds has an impact on the neighborhood area it operates because it creates jobs for folks living locally and might patronize the neighborhood suppliers.

The impact/effect of failure on the neighborhood community might lead to lack of jobs for locals and and yes it could pollute the neighborhood environment

7. Government as stakeholders is kind of direct in the sense that the company pays taxes - the more profit the business makes the more taxes it pays. And can watch out for policies that won't result to the business enterprise failure because personnel would unemployed and government will have to pay them unemployment benefit.

8. Pressure groups keep an interest available to influence how McDonald's operates. Some of this is pressure groups may think McDonalds meals are very unhealthy and therefore would try to get McDonald's to use low fat ingredients. They are really against McDonald's meals for most reasons such as destroying rainforests, the meals being unhealthy, how they deliberately exploit children and exactly how they torture and murder animals. exemplory case of this are "THE LONDON GREENPEACE GROUP"

Specialist publication written by THE LONDON GREENPEACE GROUP (accessed 17, 03, 11) [web 3]

Stakeholder conflict examples

Owner vs. customer: Profit v service e. g. conflict over opening hours

Shareholder vs. worker: Profits v high wages

Employer vs. employee: Employees see their effort reflected in higher profits for the employer. Why employers look for greater efficiency - more output for lower costs

c) Discuss one way in which the organization exercises its social responsibilities.

McDonald's is the world's leading global foodservice retailer with an increase of than 32, 000 locations serving around 64 million customers in 117 countries each day. A lot more than 80% of McDonald's restaurants worldwide are owned and operated by independent local women and men.

Responsible Environmental Practices of McDonalds

McDonald's Canada's environmental philosophy is embedded in the three traditional waste reduction principles: reduce, reuse and recycle.

Each of these is emphasized at every step of the supply chain McDonalds is best known for their role in eliminating polystyrene packaging. When, in the 1980's, concerns were raised about the potentially harmful ramifications of CFCs in the production of polystyrene

containers, they took the industry lead by working with packaging suppliers to phase out the use of CFCs.

McDonalds environmental stewardship continues and the results can be seen in communities across Canada.

By "McDonalds" on Celebrating 40 Years of Serving Canadians (accessed 20, 03, 11) [Web 4]

Another examples of McDonald global environmental responsibility practices

Energy conservation - Finding additional ways to improve energy efficiency in restaurants to conserve money and lessen environmental impacts.

Sustainable packaging and waste management - Continue exploring ways to decrease environmentally friendly impacts of consumer packaging and waste in restaurant operations.

Green building design - Enhance strict building standards to include further opportunities for environmental efficiencies and innovation in the design and construction of restaurants.

McDonalds have long recognized the worthiness of minimizing their environmental footprint. This action is not only good for the earth in which they operate, it's a solid contributor to McDonalds long-term financial success.

By McDonalds on environmental responsibility (accessed 20, 03, 11) [Web 5]

2 The economic, social and global environment

a) Using examples to support your answer, clarify what is meant by the word emerging economy. What exactly are the advantages and disadvantages compared to a command economy?

Emerging Economy aka Emerging Market Economy are fast-growing economies with low to middle per capital income. Such countries constitute approximately 80% of the global population, and represent about 20% of the world's economies posing significant political, monetary, and social risks.

Examples are China and Tunisia

Although china is regarded as one of the world's economical powerhouses, it is lumped in to the category alongside much smaller economies with less resources, like Tunisia.

Both China and Tunisia participate in this category because both have embarked on economical development and reform programs, and have begun to open up their markets and "emerge" onto the global scene

Advantages Emerging Market Economy

1. Foreign investment is attracted as information gets out on the new opportunities for earning profit for the reason that country.

2. Individuals quickly acquire the knowledge, social and technical skills desired by employers so as to function in this new economy.

3. There is certainly more innovation as organizations look for new products to sell and cheaper ways to do their business. etc

Disadvantages Emerging Market Economy

1. Distorted investment priorities, this means public health, public education and social duties will be neglected because of this of newly found wealth that provides large profit.

2. It worsen/increases exploitation of workers, because the harder, faster and longer people work the less they receives a commission and much more profit is made by the business.

3 Growing unemployment because of this of more commercial machinery usage. etc

Market Economy By Bertell Ollman (accessed 21, 03, 11) [Web 6]

Command Economy: Is actually a planned/designed financial system where government supervises distribution of resources to the factories through centralized planning.

Examples are USSR and North Korea

North Korea is the only true command economy remaining in the world today with dismal results their food production is in short supply, and exports are basically non-existent.

Advantages Command Economy

1. The government ensure that you can find equal distribution of income and wealth.

2. Necessary goods/services are being provided to the community e. g education.

3. The federal government choose which goods are being produced and how they are really produced.

4. The federal government offers a minimum quality lifestyle for all citizens.

Disadvantages Command Economy

1. Consumer have less choice since everything is allocated trough a planning process.

2. Little selection of goods and services.

3. Loss of individual freedom.

4. It results to productive inefficiency due to a lack of competition and nonprofit motives.

b) Using the business cycle model as an analysis framework, describe the current financial climate in either the united kingdom or USA and identify its origins. Discuss the steps that the UK/US government usually takes to influence the economic climate.

In the U. S. , the economy periodically rises and falls in a company cycle that is measured by fluctuations in real GDP and other macroeconomic variables. The National Bureau of Economic Research (NBER) is the federal agency that determines when the downturn is sufficient to be called a recession.

Current FINANCIAL STATE in USA

Figure 1

The US government hasn't slashed its forecasts of GDP growth in 2011, which stand at 3. 1% on the yearly basis.

The forecasts of core consumer price inflation (without volatile food and energy items) remain benign at about 1. 5% for the 12-month period ending in December 2011.

Forecast for US employment changes by march 2011

"In thousands of jobs"

Figure 2

Looking at figure 2 we can see monthly gains in employment are predicated to remain at a modest plateau level of about 200, 000 jobs per month through the middle of 2012, although isolated spikes above that level are possible.

With these job gains, the unemployment rate is expected to be about 8˜ percent by the end of 2011.

Economic indicators

Summary US economy current state

Market indicators - Corporate debt, VIX and interest rates all remain in typical ranges. Mortgage delinquencies fell slightly in fourth quarter, for the third straight quarter. Overall, U. S. equity markets rose slightly in March, Index returning 0. 45% for the month.

Economic indicators - These backward-looking indicators are all within - or near - typical ranges. The job market growth rate remained positive while consumer spending growth was positive. Core inflation continues to be low. The economy grew at a revised rate of 3. 1% for the fourth quarter.

Steps Taken To Influence The Current FINANCIAL STATE In USA

The President signed the American Recovery and Reinvestment Act, which includes been responsible for about 3 million American jobs and brought the economy back from the brink of another depression.

The most sweeping reforms because the Great Depression "Wall Street Reform" Which held Wall Street accountable, end bailouts and "too large to fail, " and enforce the strongest consumer protections ever sold.

The government signed the Small Business Jobs Act providing tax breaks and better access to credit for millions of small businesses.

They approved the HIRE Act providing a payroll tax credit for companies that hire employees who have been looking for work with 60 days or even more. Millions of staff have been hired through this process already.

The National Export Initiative was lunched with a goal of doubling exports and supporting several million new jobs over five years.

President Obama played a lead role in G-20 Summit that produced a $1. 1 trillion deal to combat the global financial crisis.

c) Explain how your own country balances its policy requirements for social welfare with those for professional and trade development.

Cyprus Social Welfare Service was introduced for the very first time in 1946, when legislation was enacted to modify the supervision of juvenile offenders, the Ministry of Labor and Social Insurance are accountable for the provision and promotion of social welfare services.

The policy of the Social Welfare Services forms an integral part of the overall governmental policy for social and monetary development and is aimed at advancing social welfare, meeting social needs and avoiding social problems among individuals, families and communities.

5 major role of Cyprus Social Welfare Services

1: Preventive Services - Prevention/Handling of Violence in the Family, Family Counseling,

Supportive Service and Maintenance Cases. etc

2. Child Protection - Day-Care of Children, Custody Cases and Institutional Services for

Children and Teenagers. etc

3. Delinquency - Submission of Socio Economic Reports, Decriminalization Process,

Probation of Minors and Adults and Supervision Orders. etc

4. Community Work - Technical Assistance, Grants to Voluntary Organizations,

Organization of Communities and Citizens. etc

5. Public Assistance - Social Benefit Scheme, Allowances, Care of elderly and disabled

persons. etc

The Social Welfare Services are already based on the strategy of europe. In order to ensure continual alignment with new developments in the European Union in this area, Social Welfare Services systematically evaluate legislation and policies and modify them accordingly.

Cyprus Industrial Development Service is aimed at accelerating the pace of growth of the manufacturing sector and making it competitive under free market conditions through

i. the reconstruction and support of the traditional manufacturing industry,

ii. the attraction of foreign direct investment, mainly capital intensive,

iii. the enhancement of existing as well as the attraction and development

of new high-tech industries.

The main obligations of the Industrial Development Service, Ministry of Commerce, Industry and Tourism, are

i. improvement and development of existing Small Medium Manufacturing Enterprises (SMEs)

ii. attracting foreign investment with the purpose of establishing new industrial units especially units producing high technology high value products

iii. harmonization with the EU directives in respect of Small Medium Enterprises (SMEs) and Industrial policy

iv. implementation of the relevant laws and representation of the ministry at several board, committees and organizations.

By Republic of Cyprus, Ministry of Commerce, Industry and Tourism (accessed 27, 03, 11) [Web 7]

Task 3: Choose a business with which you are familiar: either the main one where you currently work, or another one for which you have access to the required information. For this industry:

Identify and critically evaluate the effectives of the barriers to new entrants attempting to compete in the industry?

The footwear sector is a diverse industry which covers a wide range of materials (textile, plastics, rubber and leather) and products from different kinds of men's, women's and children's footwear to more specialized products like from sport shoes to protective footwear. This diversity of end products corresponds to a multitude of commercial processes, enterprises, market structures and competitive strategy.

Entry barriers in athletic footwear industry "Nike"

The athletic shoe industry is little by little turning into a worldwide oligopoly. There are a great number of entry barriers preventing new entrants from capturing significant market share.

Nike can enjoy economy of scale that generate cost advantages over any new rival.

Today's shoes are highly technical. An extremely large capital investment is needed for new companies to open athletic shoe factories, conduct research and design to create a popular athletic shoe.

There are six major sources of barriers to entry

Economies of Scale - Nike spends millions on product endorsements and advertisements by spreading the high cost over their entire yearly sales. The aggressive marketing campaigns turn their products into household names making it arduous for new companies to compete. e. g Nike uses corporate level strategy by opening discount factory outlet stores in rural areas and shops in urban shopping areas.

Product Differentiation - Brand recognition creates a barrier by forcing entrants to invest heavily endeavoring to surmount customer loyalty. Advertising, customer support, being first in the industry, and product dissimilarities are among the main element factors promoting brand identification. It really is perhaps the most important entry barrier in all industry.

Capital Requirements - The necessity to invest large monetary resources to be able to compete creates a barrier to entry, especially if the capital is necessary for unrecoverable expenditures in like up front advertising etc. Capital is necessary not only for fixed facilities also for customer credit, inventories, and absorbing start-up losses.

Access to Distribution Channels - The new boy on the market must, of course, secure distribution of his product or service. e. g A fresh athletic shoe must displace others from the store shelf's via price breaks, promotions, extreme selling efforts, or some other means. The more limited the wholesale or retail channels are the more that existing opponents have these ties up. Sometimes the barrier is so high that to surmount it a fresh competitor must create its own distribution channels, as Timex did in the watch industry in the 1950s.

Cost Disadvantages Independent of Size - well-established companies may have cost advantages not available to possible rivals, no matter what their size and attainable economies of scale is. These advantages can be from the effects of the "learning curve/experience curve", proprietary technology, access to the best recycleables sources, assets purchased at pre-inflation prices, government subsidies, or favorable locations, Sometimes cost advantages are legally enforceable.

Government Policy - The federal government can limit or even foreclose entry to industries with such controls as license requirements and limits on access to raw materials. They are able to also play indirect role by imposing controls such as air, water pollution standards and safety regulations.

b) Define this is of perfect competition. To what extent does your chosen industry's structure match your definition?

Perfect Competition - is a competitive system where a large number of firms produce a homogenous product for a huge variety of buyers. All the businesses share the same product/market knowledge and enjoy free entry/exit to and from the industry. They can be price-takers and sell as much of the product as you possibly can at the market price.

Output is defined where marginal cost equals marginal revenue. Over time, average earnings equals marginal cost and businesses enjoy only normal profits.

By G Stigler Perfect Competition Historically Contemplated (accessed 18, 04, 11) [Web 8]

The degree of competition in the footwear industry depends upon five basic forces, which are diagrammed in Figure 1. The collective strength of the forces determines the ultimate profit potential of an industry.

Finally relating perfect competition to the footwear industry I am going to say it is more theoretical than practical because in the real world perfect competition is very rare.

c) Identify three regulatory mechanisms that are in effect. How is compliance monitored?

1. competition regulators: ANY OFFICE of Fair Trading (OFT) is a non-ministerial government department of UK, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's financial regulator. The OFT's goal is to make markets work very well for consumers, ensuring vigorous competition between fair-dealing businesses and prohibiting unfair practices such as rogue trading, scams and cartels. Its role was modified and its own powers changed with the Enterprise Act 2002. [web 9]

2. Industrial Standards: Is an essential component of banking functions across the whole financial supply chain; they form the building blocks for thousands of payments made each day. Only via the use of standards can the industry achieve high levels of efficiency and operational certainty.

Benefits of standardization include

1) lower processing costs.

2) simplified entry standards for new participants.

3) improved resilience and integrity.

Common standards are of essential importance to all parties in the payment chain, not merely to Payment PROVIDERS.

3. Consumers Association: A regulatory body called Consumer Focus is assigned with the duty to Changes the future of consumer representation over the UK

the statutory consumer champion for England, Wales, Scotland and Northern Ireland.

They have four strategic goals

Value: help people receive less expensive by raising the influence they have over the products and services they receive

Service: improve customer service and remove unnecessary problems that generate complaints from consumers

Access: create an economy in which everyone can access the essential services they need and where in fact the poor no longer pay more or get less for his or her money

Sustainability: harness the appetite of consumers to move to more sustainable lifestyles

And their mission will usually try to be

High-Impact: make a genuine difference to consumers' lives

Innovative: offer new solutions and work in new ways

In Touch: represent real concerns, including those of vulnerable consumers

A set of organizations that are being used for compliance monitoring

1. Global Social Compliance: is targeted at harmonizing existing efforts and deliver a common, constant and global approach for the continuous improvement of working and environmental conditions in various industries about the world.

2. SOMO: is an independent, non-profit research and network organization that works on social, ecological and monetary issues related to sustainable development, investigating multinational corporations and the results with their activities for people and the surroundings across the world.

3. Verite: Ensures that individuals across the world work under safe, fair and legal conditions with an initial concentrate on illuminating problems, identifying solutions, implementing changes and documenting impacts. While using leverage of international business to improve the income, security and freedom of workers about the world.

Task 4 - The importance of international trade and the European dimension for UK businesses

Describe and discuss the role of foreign direct investment (FDI) in globalization.

Foreign direct investment: May be the net inflows of investment and its use to get a lasting management interest (10% or more of voting stock) in any enterprise operating within an economy besides that of the investor. It is the sum of equity capital reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. It involves participation in management, joint-venture, transfer of technology and expertise.

There are two types of FDI

1. Inward foreign direct investment

2. Outward foreign direct investment

Direct investment excludes investment through purchase of shares.

Created by Franklin uge

This an example of FDI where we see companies merging or one taking over the other,

Advantages

Jumping the tariff wall "and other non- tariff

barriers".

Securing access to minerals found in the host country.

Lower wage in host developing countries for

labor.

Protection of market shares in exports if MNE's rivals also have established plants in the area.

Disadvantages:

More costly travel/communications abroad.

Less knowledge of local business tax laws, business scene generally, and various government regulations.

The MNEs face risks such as exchange rate

fluctuation, expropriation by the government and other actions that may be taken against them.

Language and culture differences

Higher wages/benefits must be paid to the

personnel going abroad.

GLOBALIZATION AND FDI

It is universally claimed that increasing capital mobility can be an integral part of globalization on the globe, political economy has eroded the ability of governments to make policies that constrain the actions of transnational corporations within their jurisdictions.

This view is widespread amidst both critics and supporters of globalization in the business world.

Concentrating on globalization it is often seen that the competition for FDI between states explains the trend into the liberalization of inward FDI rules.

In other words globalization produces a beneficial 'race to the top' in regulatory and policy standards.

So considering it from both sides there exists conformity that globalization along with transactional corporation enjoy increasing levels of influence or 'structural power' over national policies.

b) Discuss advantages and disadvantages of price intervention in the EU agricultural sector. What do you conclude?

The Advantages

For all the aims there were advantages. In the first many years of the CAP, it mainly benefited the farmers and consumers within Europe more than other people. The European people stated that the CAP insured that they could purchase food at a stable price.

They also said that the CAP made sure that there is plenty of food and this it was available to everyone. The best part for the consumers was that these produces were reasonably prices for such quantities.

The farmers also benefited a great deal. Prior to the CAP, farmers within the EC struggled to produce enough for the consumers. This meant that they were getting paid less, and that they had to grow less as they didn't have enough funds to do their jobs. Following the CAP had been put to action, the farmers were being supported financially to grow produce and earned money through selling it.

The market had become stable and the farmers were earning a guaranteed amount of money per produce. This meant that the more they grow the greater they earn.

The farmers now also had access to machinery, fertilizers and pesticides to increase their outputs.

The level of imported goods had decreased, giving the farmers and producers more chance of selling their own products. This meant that there is less competition for the EC among other countries. Now they could be rest assured that their produce would be bought more than that of countries abroad.

The Disadvantages

Although the CAP provided advantages listed above, there are also a few disadvantages. One concern is the fact that 70% of the EC's budget was being spent on farmers while only 5% of the EC's income originated from farming. This meant that the EC was losing money to farming. This also meant that the EC was actually getting a less reliable market because the costs varied constantly. Another problem was that farmers were being told to produce whenever you can. As technology improved, the EC's farmers increased their output. This resulted in a big surplus of food that the EU needed to buy. Due to that the EU, too, was losing profits to farming. That had not been the sole problem. The farmers were encouraged to utilize artificial fertilizers and pesticides, which created more of a problem for the surroundings.

Because the policy partially centered on making the EC self-sufficient, imports were being put through duties. This became an issue for less economically developed countries as they cannot compete with the prices of the EC and they could not sell their produce. Such problems also afflicted some EC farmers. As the farms became larger and more efficient but only the most prosperous farmers benefited from selling their produce. The smaller farms were bought out and put out of business.

The way the CAP has changed the agricultural sector shows how the EU is setting a good example, which is beyond dispute that, as far as agricultural policy reform is concerned, it is a long way ahead from the rest of the developed world.

Finally the EU has made efforts to make agriculture better in less economically developed countries. Two good examples will be the Fair Trade and the Green Revolution.

c) How might UK businesses reap the benefits of entry into the European Monetary Union? What exactly are the potential disadvantages?

Advantages

1. Transaction costs: For instance, Uk firms currently spend about 1. 5 billion a year buying and selling foreign currencies to conduct business in the EU. Using the EMU this is eliminated, so increasing profitability of EU firms.

e. g You are able to continue holiday without having to worry about getting the money changed, therefore avoiding high conversion charges.

2. Price transparency: EU firms and households often find it difficult to accurately compare the costs of goods, services and resources over the EU as a result of distorting effects of exchange rate differences.

This discourages trade. According to economic theory, prices should act as a mechanism to allocate resources within an optimal way, to be able to improve economical efficiency. There's a far greater potential for this happening across an area where E. M. U exists.

e. g We can buy things without wrecking our brains wanting to calculate what price it is in our currency.

3. Uncertainty caused by Exchange rate fluctuations eliminated: Many firms become wary when buying other countries because of the uncertainty caused by the fluctuating currencies in the EU. Investment would rise in the EMU area as the currency is universal within the area, therefore the anxiety that once was apparent is forget about there.

4. Prevent war: The EMU is, and you will be a political project. It's founding is a step towards European integration, to prevent war in the union. It's a well known fact that countries who trade effectively together don't wage war on each other and if EMU means more content trade, then this means, peace throughout Europe and beyond "I hope".

5. Increased Trade and reduced costs to firms: Proponents of the move argue that it brings considerable monetary trade through the wiping out of exchange rate fluctuations, but as well as this it can help to lessen costs to industry because companies won't have to buy forex for use within the EU. etc

Disadvantages

1. Fear of recession: If governments were obliged, through a stability pact, to keep to the Maastricht criteria for perpetuity, whatever their individual economical circumstances dictate, some countries could find that they are unable to combat recession by loosening their fiscal stance. Members are unable to devalue to be able to boost exports, to borrow more to boost job creation or even to cut taxes when they see fit because of the public deficit criterion. However, the Maastricht Treaty permits aid packages for euro members whose economy has come across serious trouble.

2. Differing economic cycles: EU members all have diverse financial cycles, or at some point in the cycle either its booming or in recession. e. g the united kingdom economy at the moment is on the rise, while Greece is within deep recession. Reverse is the case in1990.

Critics of Emu the idea of a single monetary system will bring to a finish the policy option to create interest levels separately at a proper level for Member states.

3. Language difficulties: sometimes appears as a barrier with the single monetary policy and can only be successful if all the member states have an individual legal framework (taxation, labour laws etc) and a labour force that is mobile.

Monetary union works in america due to a mobile labour market, helped by the universal language etc. Considering the EU on the other hand, 27 different countries with widely conflicting economical performances and diverse languages haven't attempted such a project before the EU treaty. Language in EU is a barrier to labour force mobility. This may result to a substantial amount of depressed areas where people cannot find work, while the areas have a flourishing economy.

Despite the actual fact that EU's cohesion funds tries to handle this, differences across the Union is large in conditions of economical performance.

4. Lack of sovereignty: Country Losing their national sovereignty is one of the key disadvantage of EMU. The transfer of money and fiscal competencies from national to community level, means economically strong and stable countries would need to co-operate in the field of monetary policy with other, weaker, countries, which are more tolerant to raised inflation.

Politicians in the united kingdom, warn that the introduction of EMU could eventually lead to the end of the nation state.

5. Cost: The high cost of introducing the single currency. THE UNITED KINGDOM Retailing association estimates that British retailers will have to pay between 1. 7 billion and 3. 5 billion to make the necessary changes.

This changes include educating customers, changing labels, training staff, changing computer software and adjusting tills. etc

In my very own opinion the benefits of EMU outweigh the costs. Therefore, I am in favour of EMU

By Nikolaus K. A. Lufer (accessed 01, 05, 11) [Web 10]

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