The Eurozone is a group of European Union countries that use the euro as their currency.
It was established in 1999 and currently has 19 members, with others planning to switch to the currency.
The European Central Bank ECB based in Frankfurt, Germany, controls the monetary affairs of the Eurozone. Some countries outside the European Union also use the euro.
The eurozone is a term used to describe those countries which are members of the European Union and which use the euro as their currency. As of November 2010, there were 16 European Union members using the euro, and other European nations were planning to switch to the currency. Several nations outside the European Union also use the euro.
The euro area, commonly called the eurozone, is a currency union of twenty member states of the European Union (EU) that have adopted the euro as their primary currency and sole legal tender, and have thus fully implemented EMU policies.
The euro area consists of those Member States of the European Union that have adopted the euro € as their currency.
Officially, the Eurozone began on January 1, 1999, when 11 countries in Europe adopted the euro as their official currency. These nations were Spain, Austria, Portugal, Belgium, the Netherlands, Luxembourg, Finland, Italy, France, Ireland and Germany. About 300 million citizens originally participated in this monetary union. These nations didn’t actually start using euro coins and paper money until January 1, 2002. During the previous year, the euro was used in electronic transactions.
History of the Eurozone
The history of the Eurozone dates back to the 1957 Treaty of Rome, which provided for closer relations between European nations through a common market. This pact was followed by agreements in the 1980s and 1990s, including the 1986 Single European Act and the 1992 Maastricht Treaty. The latter created Economic and Monetary Union, designed to make the shared currency. In late 1995, what would become the original Eurozone nations met in Madrid and decided when to launch the euro.
Located in Frankfurt, Germany, the European Central Bank controls the monetary affairs of the Eurozone.
The European System of Central Banks, however, is responsible for printing and distributing the euro. Central banks of Eurozone members also have a hand in the currency. Currently, the euro (€) is the official currency of 20 out of 27 EU member countries which together constitute the Eurozone, officially called the euro area or euro zone.
The next five nations to join the 11 original members of the Eurozone were Greece, Spain, Slovakia, Slovenia and Malta. Other European nations have also decided to use the euro. The Baltic nation of Estonia was due to start using the euro on January 1, 2011. Its neighbours Lithuania and Latvia are due to join the Eurozone within a few years.
Nations that do not participate in the European Union or as official members of the Eurozone also use the currency. As of October 2022, these included Vatican City (SCV), Andorra, San Marino Republic (RSM), Kosovo, Monaco Principality and Montenegro in Europe.
Eurozone member territories have also used the euro as their official currency, including former colonies like Guadeloupe, French Guiana, Martinique, Réunion, Mayotte and Saint-Pierre et Miquelon.
Criticism of the EuroZone
A study from the Centre for European Policy made in 2019 concluded that while some countries had gained from adopting the euro, several countries were poorer than they would have been had they not adopted it, with France and Italy being particularly affected.
The publication prompted a large number of reactions, pushing its authors to put out a statement clarifying some points.
In 2020, another study from the University of Bonn (Germany) reached a quite similar conclusion: the adoption of the euro made “some mild losers (France, Germany, Italy, and Portugal) and a clear winner (Ireland)”. Both studies used the synthetic control method to estimate what might have happened if the euro hadn’t been adopted.
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