Best Exchange Rate For Euros: How The European Debts Affect You

February 29th, 2012

Getting the best exchange rate for euros is now, more than ever imperative for those who are traveling into the Euro zone. The zone consists of 17 countries all using the Euro currency. Over the course of the past 14 months, the zone has seen massive problems arise from the need to bailout a number of included countries.  Both Portugal and Ireland received multi billions debt packages, in order to rescue their economies. Greece however, is the major contributor to the instability as they received the first debt package back in May 2010 and they are now seeking another bailout.

If Greece continues to fail they will find that exchange rates euros will not be favourable to them and if they cannot balance their accounts the country will in affect become bankrupt. This would then have the knock on effect of increasing the cost to other Eurozone members. This may lead other countries i.e. Ireland and Portugal, to fall back into trouble.

So getting the best exchange rate pound to euro is increasingly important. As the UK is not one of the sixteen countries in the Eurozone, we are not directly affected. However, as a member of the international monetary fund, the country will have to make contributions to the bailouts for the failing countries. A bigger issue is that many British banks lent money to Greece, after the initial bailout. If Greece was to fail again it would cost them billions. An even bigger potential problem may arise if the rest of the Eurozone cannot take the strain of a subsequent bankruptcy. As many British banks have lent huge amounts of money to the larger European countries such as Spain. If these debts are reneged on, then it could cause another credit crunch and return to recession for the UK.

Another major factor in terms of best exchange rate for euros is business to business transactions. As these take place every day, when importing and exporting, getting the best exchange rates are key. With the euro in trouble and the currency devalued, the future of the Eurozone is looking uncertain. With a number of prominent commenters already proclaiming that the currency cannot continue in its current form.