Page 405 - SSB Interview: The Complete Guide, Second Edition

Risks of having a single currency

No Exchange Rate Protection: The major risk of having a single
currency is that member states will have no exchange rate protection

from external shocks. It is feared that wealth would drain away from the
periphery towards the European centre.

Can Increase Unemployment: This could drive up unemployment in
the weaker members of the Union, especially as labour mobility in the

EU is low.

European Union Constitution

First-ever EU constitution signed: On 29 October 2004, the European
Union constitution was signed by the member nations in Rome. The

treaty was the result of 28 months of acrimonious debate between the 25

EU governments and was agreed upon on 12 January 2005.

The EU constitution does not replace national constitutions; it coexists
with them, having its own autonomy and sphere of jurisdiction.

The EU constitution is to a large extent a consolidation of existing
national laws.

The 460-article constitution streamlines EU decision-making by

dropping national vetoes in areas such as justice and immigration and
gives more power to the European Parliament.

The constitution creates a long-term President and Foreign Minister to
represent the EU on the world stage.

The constitution foresees simpler voting rules to end decision gridlocks.

The EU constitution does not interfere in the foreign and defence policy,

social security, taxation or cultural matters of member states.

To come into force, the EU constitution has to be ratified by the member

states within a three-year timetable. The EU constitution must be backed
by either a majority vote in the parliament or a referendum. It will not

come into force if even one of the member states fails to ratify.