Question

Beginning in 1995, most countries in the European Union started to switch to a common currency. The values of different European currencies were linked to the euro. Countries in the European Union could then trade without converting currency. Why would adopting a common currency be helpful for European traders?

Answer 1

Adopting a single currency is essential to having a smooth internal economy. When many states trade with different currencies within a closed environment, people who wish to buy products across boundaries have to convert currencies, which usually involves a fee.