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Eurozone
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{{short description|Area in which the euro is the official currency}}{{Use dmy dates|date=December 2017}}







factoids
|label1 = Policy ofEuropean Union}}|label2 = TypeCurrency union>Monetary union|label3 = Currency|data3 = Euro|label4 = Established|data4 = 1 January 1999|label5 = Memberstitlestyle=font-weight:normal; background:transparent; text-align:left;{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglist{{flaglistFurther usage}}|header6 = Governance|label7 = Political control|data7 = EurogroupEuro Group#President>Group president|data8 = Mário CentenoCentral bank>Issuing authority|data9 = European Central BankPresident of the European Central Bank>ECB president|data10 = Mario Draghi|header11 = Statistics|label12 = Area|data12 = 2,753,828 km2|label13 = Population(2019)PUBLISHER=EPP.EUROSTAT.EC.EUROPA.EU, |label14 = Density|data14 = 124/km2Gross domestic product>GDP (Nominal)(2018)|data15 = Total: €11.6 (~US$13.0) trillionPer capita: €33,900 (~US$38,000)WEB,weblink Gross domestic product at market prices, Epp.eurostat.ec.europa.eu, Monetary policy#Interest rates>Interest rate|data16 = -0.50%|label17 = Inflation|data17 = 0.2%HICP – all items – annual average inflation rate Eurostat|label18 = Unemployment(2019)|data18 = 7.5%Harmonised unemployment rate by gender – total – [teilm020,; Total % (SA) EurostatList of countries by current account balance>Trade balance|data19 = €0.2 trillion trade surplusFor the whole of 2017}}{{Politics of the European Union}}The eurozone, officially called the euro area,WEB, the EU Publications Office, Countries, languages, currencies, Interinstitutional style guide,weblink 2 February 2009, The euro area {{webarchive |url=https://web.archive.org/web/20130806204322weblink |date=6 August 2013}}, European Central Bank is a monetary union of 19 of the 28 European Union (EU) member states which have adopted the euro (€) as their common currency and sole legal tender. The monetary authority of the eurozone is the Eurosystem. The other nine members of the European Union continue to use their own national currencies, although most of them are obliged to adopt the euro in the future.The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. Other EU states (except for Denmark and the United Kingdom) are obliged to join once they meet the criteria to do so.WEB,weblink Who can join and when?, 10 September 2012, European Commission, No state has left, and there are no provisions to do so or to be expelled.NEWS, Fox, Benjamin, Dutch PM: Eurozone needs exit clause,weblink 18 June 2013, EUobserver.com, 1 February 2013, Andorra, Monaco, San Marino, and Vatican City have formal agreements with the EU to use the euro as their official currency and issue their own coins.WEB,weblink The government announces a contest for the design of the Andorran euros, 19 March 2013, 26 March 2013, Andorra Mint, dead,weblink" title="web.archive.org/web/20130822005234weblink">weblink 22 August 2013, dmy-all, WEB,weblinkweblink" title="web.archive.org/web/20131004224909weblink">weblink dead, 4 October 2013, Nouvelles d'Andorre, 1 February 2013, 2 February 2013, French, Kosovo and Montenegro have adopted the euro unilaterally, but these countries do not officially form part of the eurozone and do not have representation in the European Central Bank (ECB) or in the Eurogroup.A glossary {{webarchive |url=https://web.archive.org/web/20130514162558weblink |date=14 May 2013}} issued by the ECB defines "euro area", without mention of Monaco, San Marino, or the Vatican.The ECB, which is governed by a president and a board of the heads of national central banks, sets the monetary policy of the zone. The principal task of the ECB is to keep inflation under control. Though there is no common representation, governance or fiscal policy for the currency union, some co-operation does take place through the Eurogroup, which makes political decisions regarding the eurozone and the euro. The Eurogroup is composed of the finance ministers of eurozone states, but in emergencies, national leaders also form the Eurogroup.Since the financial crisis of 2007–08, the eurozone has established and used provisions for granting emergency loans to member states in return for enacting economic reforms. The eurozone has also enacted some limited fiscal integration: for example, in peer review of each other's national budgets. The issue is political and in a state of flux in terms of what further provisions will be agreed for eurozone change.

Territory

European Union member states

In 1998, eleven member states of the European Union had met the euro convergence criteria, and the eurozone came into existence with the official launch of the euro (alongside national currencies) on 1 January 1999. Greece qualified in 2000, and was admitted on 1 January 2001 before physical notes and coins were introduced on 1 January 2002, replacing all national currencies. Between 2007 and 2015, seven new states acceded.{| class="wikitable sortable" style="font-size:90%; line-height:1.33"! State! Adopted! Population2019! Nominal GNI2014(USD,millions)WEB,weblink Archived copy, 23 June 2016, live,weblink" title="web.archive.org/web/20160507043605weblink">weblink 7 May 2016, dmy, ! Relative GNIof total, nominal! GNI percapitanominal,2014 (USD)WEB,weblink Archived copy, 24 February 2016, live,weblink" title="web.archive.org/web/20161028170148weblink">weblink 28 October 2016, dmy, ! Pre-eurocurrency! class="unsortable"| Exceptions! class="unsortable"| ISOcodeAustria}}DATE=11 MAY 1998JOURNAL=OFFICIAL JOURNAL OF THE EUROPEAN UNIONNUMBER=139/30, {{formatnum:8,858,775}} {{Nts|423,906}} {{percentage 12701834 | pad=2}} {{Nts|49,670}} Austrian schilling>Schilling|| ATBelgium}}| 1999-01-01 {{formatnum:11,467,923}} {{Nts|530,558}} {{percentage 12701834 | pad=2}} {{Nts|47,260}}Belgian franc>Franc|| BECyprus}}DATE=18 JULY 2007JOURNAL=OFFICIAL JOURNAL OF THE EUROPEAN UNIONNUMBER=186/29, {{formatnum:875,898}} {{Nts|22,519}} {{percentage 12701834 | pad=2}} {{Nts|26,370}}Cypriot pound>Pound''{{flag}}The self-declared Turkish Republic of Northern Cyprus'' is not recognised by the EU and uses the Turkish lira. However the euro does circulate widely.{{citation needed>date=May 2018}}| CYEstonia}}DATE=28 JULY 2010JOURNAL=OFFICIAL JOURNAL OF THE EUROPEAN UNIONNUMBER=196/24, {{formatnum:1,324,820}} {{Nts|24,994}} {{percentage 12701834 | pad=2}} {{Nts|19,030}}Estonian kroon>Kroon|| EEFinland}}| 1999-01-01 {{formatnum:5,517,919}} {{Nts|264,554}} {{percentage 12701834 | pad=2}} {{Nts|48,420}}Finnish markka>Markka|| FIFrance}}| 1999-01-01 {{formatnum:67,028,048}} {{Nts|2,844,284}} {{percentage 12701834 | pad=2}} {{Nts|42,960}}French franc>Franc| {{NCL}}French Pacific territories use the CFP franc, which is pegged to the euro.(1 franc = 0.00838 euro){{PYF}}{{WLF}}| FRGermany}}| 1999-01-01 {{formatnum:83,019,214}} {{Nts|3,853,623}} {{percentage 12701834 | pad=2}} {{Nts|47,640}}Deutsche Mark>Mark|| DEGreece}}DATE=7 JULY 2000JOURNAL=OFFICIAL JOURNAL OF THE EUROPEAN UNIONNUMBER=167/19, {{formatnum:10,722,287}} {{Nts|250,095}} {{percentage 12701834 | pad=2}} {{Nts|22,680}}Greek drachma>Drachma|| GRIreland}}| 1999-01-01 {{formatnum:4,904,226}} {{Nts|214,711}} {{percentage 12701834 | pad=2}} {{Nts|46,550}}Irish pound>Pound|| IEItaly}}| 1999-01-01 {{formatnum:60,359,546}} {{Nts|2,147,247}} {{percentage 12701834 | pad=2}} {{Nts|34,270}}Italian lira>Lira23px) Campione d'ItaliaUses the Swiss franc. However the euro is also accepted and circulates widely.| ITLatvia}}DATE=18 JULY 2013JOURNAL=OFFICIAL JOURNAL OF THE EUROPEAN UNIONNUMBER=195/24, {{formatnum:1,919,968}} {{Nts|30,413}} {{percentage 12701834 | pad=2}} {{Nts|15,280}}Latvian lats>Lats|| LVLithuania}}DATE=31 JULY 2014JOURNAL=OFFICIAL JOURNAL OF THE EUROPEAN UNIONNUMBER=228/29, {{formatnum:2,794,184}} {{Nts|45,185}} {{percentage 12701834 | pad=2}} {{Nts|15,430}}Lithuanian Litas>Litas|| LTLuxembourg}}| 1999-01-01 {{formatnum:613,894}} {{Nts|42,256}} {{percentage 12701834 | pad=2}} {{Nts|75,990}}Luxembourgish franc>Franc|| LUMalta}}DATE=18 JULY 2007JOURNAL=OFFICIAL JOURNAL OF THE EUROPEAN UNIONNUMBER=186/32, {{formatnum:493,559}} {{Nts|8,889}} {{percentage 12701834 | pad=2}} {{Nts|21,000}}Maltese lira>Lira|| MTNetherlands}}| 1999-01-01 {{formatnum:17,282,163}} {{Nts|874,590}} {{percentage 12701834 | pad=2}} {{Nts|51,890}}Dutch guilder>GuilderAruban florin, which is pegged to the US dollar.(1 dollar = 1.79 florins){{Flagicon>Curaçao}} CuraçaoCurrently uses the Netherlands Antillean guilder and had planned to introduce the Caribbean guilder in 2014, although the change has been delayed. HTTP://WWW.CENTRALBANK.AN/FAQ >TITLE=ARCHIVED COPY URL-STATUS=DEAD ARCHIVEDATE=7 APRIL 2014 Sint Maarten}} Sint Maarten{{Flagicon|Netherlands}} Caribbean NetherlandsUses the US Dollar.| NLPortugal}}| 1999-01-01 {{formatnum:10,276,617}} {{Nts|222,126}} {{percentage 12701834 | pad=2}} {{Nts|21,360}}Portuguese escudo>Escudo|| PTSlovakia}}DATE=24 JULY 2008JOURNAL=OFFICIAL JOURNAL OF THE EUROPEAN UNIONNUMBER=195/24, {{formatnum:5,450,421}} {{Nts|96,200}} {{percentage 12701834 | pad=2}} {{Nts|17,750}}Slovak koruna>Koruna|| SKSlovenia}}DATE=15 JULY 2006JOURNAL=OFFICIAL JOURNAL OF THE EUROPEAN UNIONNUMBER=195/25, {{formatnum:2,080,908}} {{Nts|48,625}} {{percentage 12701834 | pad=2}} {{Nts|23,580}}Slovenian tolar>Tolar|| SISpain}}| 1999-01-01 {{formatnum:46,934,632}} {{Nts|1,366,027}} {{percentage 12701834 | pad=2}} {{Nts|29,440}}Spanish peseta>Peseta|| ES class="sortbottom" {{Flagicon|European Union}} Eurozone {{formatnum:341,925,002}} {{Nts|13,265,378}} '''{{percentage 13265378}}''' {{Nts|39,162}}| {{n/a}}| {{n/a}}EZ is not assigned, but is reserved for this purpose, in ISO-3166-1.}}

Dependent territories of EU member states — outside EU

Five of the dependent territories of EU member states not part of the EU, have adopted the euro:

Non-member usage

{{Further|International status and usage of the euro}}{{Euro accession map}}

With formal agreement

The euro is also used in countries outside the EU. Four states – Andorra, Monaco, San Marino, and Vatican City —WEB,weblink Agreements on monetary relations (Monaco, San Marino, the Vatican and Andorra), 30 September 2004, 12 September 2006, European Communities, WEB, The euro outside the euro area, Europa (web portal),weblink 26 February 2011, have signed formal agreements with the EU to use the euro and issue their own coins. Nevertheless, they are not considered part of the eurozone by the ECB and do not have a seat in the ECB or Euro Group.Several currencies are pegged to the euro, some of them with a fluctuation band and others with an exact rate.For example, the West African and Central African CFA francs are pegged exactly at 655.957 CFA to 1 EUR.In 1998, in anticipation of Economic and Monetary Union of the European Union, the Council of the European Union addressed the monetary agreements France had with the CFA Zone and Comoros and ruled that the ECB had no obligation towards the convertibility of the CFA and Comorian francs.The responsibility of the free convertibility remained in the French Treasury.

Other

Kosovo{{Kosovo-note}} and Montenegro officially adopted the euro as their sole currency without an agreement and, therefore, have no issuing rights. These states are not considered part of the eurozone by the ECB. However, sometimes the term eurozone is applied to all territories that have adopted the euro as their sole currency.WEB,weblink European Foundation Intelligence Digest, Europeanfoundation.org, 30 May 2010, dead,weblink" title="web.archive.org/web/20070826141401weblink">weblink 26 August 2007, WEB,weblink Euro used as legal tender in non-EU nations, International Herald Tribune, 1 January 2007, 22 November 2010, dead,weblink" title="web.archive.org/web/20081210203907weblink">weblink 10 December 2008, NEWS,weblink Europe, The eurozone's 13th member, BBC News, 11 December 2001, 30 May 2010, Further unilateral adoption of the euro (euroisation), by both non-euro EU and non-EU members, is opposed by the ECB and EU.WEB,weblink Unilateral Euroization By Iceland Comes With Real Costs And Serious Risks, Lawofemu.info, 15 February 2008,weblink" title="web.archive.org/web/20120314000247weblink">weblink 14 March 2012, 28 February 2015, {{Clear}}

Historical eurozone enlargements and exchange-rate regimes for EU members

{{Further|History of the euro}}The chart below provides a full summary of all applying exchange-rate regimes for EU members, since the European Monetary System with its Exchange Rate Mechanism and the related new common currency ECU was born on 13 March 1979. The euro replaced the ECU 1:1 at the exchange rate markets, on 1 January 1999. During 1979-1999, the D-Mark functioned as a de facto anchor for the ECU, meaning there was only a minor difference between pegging a currency against ECU and pegging it against the D-mark.{{Exchange-rate regime for EU members}}The eurozone was born with its first 11 member states on 1 January 1999. The first enlargement of the eurozone, to Greece, took place on 1 January 2001, one year before the euro had physically entered into circulation. The next enlargements were to states which joined the EU in 2004, and then joined the eurozone on 1 January in the year noted: Slovenia (2007), Cyprus (2008), Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), and Lithuania (2015).All new EU members joining the bloc after the signing of the Maastricht treaty in 1992 are obliged to adopt the euro under the terms of their accession treaties. However, the last of the five economic convergence criteria which need first to be complied with in order to qualify for euro adoption, is the exchange rate stability criterion, which requires having been an ERM-member for a minimum of two years without the presence of "severe tensions" for the currency exchange rate.In September 2011, a diplomatic source close to the euro adoption preparation talks with the seven remaining new member states who had yet to adopt the euro (Bulgaria, Czech Republic, Hungary, Latvia, Lithuania, Poland and Romania), claimed that the monetary union (eurozone) they had thought they were going to join upon their signing of the accession treaty may very well end up being a very different union entailing much closer fiscal, economic and political convergence. This changed legal status of the eurozone could potentially cause them to conclude that the conditions for their promise to join were no longer valid, which "could force them to stage new referendums" on euro adoption.WEB, New EU members to break free from euro duty,weblink Euractiv.com, 13 September 2011, 7 September 2013, {| class="wikitable sortable"! Country! Old unit! Exchange rate(Euro in units of old currency)! Year| Belgium| Belgian franc| 40.3399| 1999| Luxembourg| Luxembourgish franc| 40.3399| 1999| Germany| Deutsche Mark| 1.95583| 1999| Spain, AndorraAndorra got a formal agreement on euro usage in 2011| Spanish peseta| 166.386| 1999| France, Monaco, Andorra| French franc| 6.55957| 1999| Ireland| Irish pound| 0.787564| 1999| Italy, San Marino, Vatican City| Italian lira| 1936.27| 1999| Netherlands| Dutch guilder| 2.20371| 1999| Austria| Austrian schilling| 13.7603| 1999| Portugal| Portuguese escudo| 200.482| 1999| Finland| Finnish markka| 5.94573| 1999| Greece| Greek drachma| 340.75| 2001| Slovenia| Slovenian tolar| 239.64| 2007| Cyprus| Cypriot pound| 0.585274| 2008| Malta| Maltese lira| 0.4293| 2008| Slovakia| Slovak koruna| 30.126| 2009| Estonia| Estonian kroon| 15.6466| 2011| Latvia| Latvian lats| 0.702804 | 2014| Lithuania| Lithuanian litas| 3.4528| 2015

Future enlargement

{{Supranational European Bodies|align=right|size=400px}}Nine countries (Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden, and the United Kingdom) are EU members but do not use the euro. Before joining the eurozone, a state must spend two years in the European Exchange Rate Mechanism (ERM II). As of January 2017, only the National Central Bank (NCB) of Denmark participates in ERM II.Denmark and the United Kingdom obtained special opt-outs in the original Maastricht Treaty. Both countries are legally exempt from joining the eurozone unless their governments decide otherwise, either by parliamentary vote or referendum.The other seven countries are obliged to adopt the euro in future, although the EU has so far not tried to enforce any time plan. They should join as soon as they fulfill the convergence criteria, which include being part of ERM II for two years. Sweden, which joined the EU in 1995 after the Maastricht Treaty was signed, is required to join the eurozone. However, the Swedish people turned down euro adoption in a 2003 referendum and since then the country has intentionally avoided fulfilling the adoption requirements by not joining ERM II, which is voluntary.WEB,weblink Sverige sa nej till euron, Swedish Parliament, 28 August 2013, 12 August 2014, Swedish, WEB,weblink Information on ERM II, European Commission, 22 December 2009, 16 January 2010, Interest in joining the eurozone increased in Denmark, and initially in Poland, as a result of the 2008 financial crisis. In Iceland, there was an increase in interest in joining the European Union, a pre-condition for adopting the euro.NEWS, Dougherty, Carter, Buffeted by financial crisis, countries seek euro's shelter, International Herald Tribune, 1 December 2008,weblink 2 December 2008, {{dead link|date=May 2014}} However, by 2010 the debt crisis in the eurozone caused interest from Poland, as well as the Czech Republic, to cool.NEWS,weblink Czechs, Poles cooler to euro as they watch debt crisis, Reuters, 16 June 2010, 18 June 2010, Latvia adopted the Euro in 2014, followed by Lithuania in 2015.NEWS,weblink Eurozone's newest member: Lithuania, CNNMoney, 2 January 2015, 2 January 2015,

Expulsion and withdrawal

{{see also|Greek withdrawal from the eurozone}}In the opinion of journalist Leigh Phillips and Locke Lord's Charles Proctor,"Brussels: No one can leave the euro" by Leigh Phillips, EUobserver, 8 September 2011"The Eurozone crisis – the final stage?" by Charles Proctor, Locke Lord, 15 May 2012 there is no provision in any European Union treaty for an exit from the eurozone. In fact, they argued, the Treaties make it clear that the process of monetary union was intended to be "irreversible" and "irrevocable." However, in 2009, a European Central Bank legal study argued that, while voluntary withdrawal is legally not possible, expulsion remains "conceivable.""Withdrawal and Expulsion from the EU and EMU : Some reflections" by Phoebus Athanassiou, Principal Legal Counsel with the Directorate-General for Legal Service, ECB, 2009 Although an explicit provision for an exit option does not exist, many experts and politicians in Europe, have suggested an option to leave the Eurozone should be included in the relevant treaties."German advisory council calls for exit option in the eurozone" by Daniel Tost, EurActiv, 29 July 2015On the issue of leaving the eurozone, the European Commission has stated that "[t]he irrevocability of membership in the euro area is an integral part of the Treaty framework and the Commission, as a guardian of the EU Treaties, intends to fully respect [that irrevocability]." It added that it "does not intend to propose [any] amendment" to the relevant Treaties, the current status being "the best way going forward to increase the resilience of euro area Member States to potential economic and financial crises.Text of response by Olli Rehn, European Commissioner for Economic and Monetary Affairs and the Euro, on behalf of the European Commission, to question submitted by Claudio Morganti, Member of the European Parliament, 22 June 2012 The European Central Bank, responding to a question by a Member of the European Parliament, has stated that an exit is not allowed under the Treaties.Text of message by Mario Draghi, ECB, to Claudio Morganti, Member of the European Parliament, 6 November 2012Likewise there is no provision for a state to be expelled from the euro.Athanassiou, Phoebus (December 2009) Withdrawal and Expulsion from the EU and EMU, Some Reflections (PDF), European Central Bank. Retrieved 8 September 2011 Some, however, including the Dutch government, favour the creation of an expulsion provision for the case whereby a heavily indebted state in the eurozone refuses to comply with an EU economic reform policy.WEB, Phillips, Leigh,weblink EUobserver / Netherlands: Indebted states must be made ‘wards’ of the commission or leave euro, Euobserver.com, 20 May 2014, In a Texas law journal, University of Texas at Austin law professor Jens Dammann has argued that even now EU law contains an implicit right for member states to leave the Eurozone if they no longer meet the criteria that they had to meet in order to join it.JOURNAL, Dammann, Jens, The Right to Leave the Eurozone, U of Texas Law, Public Law Research Paper, 10 February 2012, 48, 2013, 2, 2262873, Furthermore, he has suggested that, under narrow circumstances, the European Union can expel member states from the eurozone.JOURNAL, Dammann, Jens, Paradise Lost: Can the European Union Expel Countries from the Eurozone, Vanderbilt Journal of Transnational Law, 26 August 2015, 49, 2016, 2, 2827699, University of California, Berkeley professor of Economics and Political Science Barry Eichengreen, argued in 2007 that "Europe’s leap to monetary union was a mistake...compounded by...including [in the union] also...Italy, Spain, Portugal and Greece," and that "although a breakup was not impossible...it was unlikely," given the technical, political and above all economic obstacles. "On the first minute that word got out," Eisengreen argued, "that the [Greek] government was discussing the possibility [of a Grexit] investors would sell their Greek stocks and bonds" and there "would be a full-fledged financial panic... a full-out bank run." In 2011, he still believed the probability of Grexit was "very low" and in case of any bank run "the Greek government would almost certainly receive support for its banks from its European Union partners and the European Central Bank, because, in his view, more financial crises in other European countries are... the last thing that German business wants." As he put it, "the German economic miracle of the last ten years can be summed up in one word: exports. And the country’s export competitiveness has been greatly enhanced by a euro exchange rate that has been kept down at reasonable levels by the fact that Germany shares the currency with other weaker economies."Eichengreen, Barry (23 July 2011)Can the Euro Area Hit the Rewind Button? (PDF), University of California. Retrieved 8 September 2011In Greece's case, one additional obstacle presented by analysts is that if Greece were to replace the euro with a new national currency, this would not be possible to achieve quickly enough. Paper banknotes must be printed and coins minted, which would take about "six months."WEB,weblink De La Rue silent on deal to print Drachma, 29 May 2012, 11 February 2015, The Daily Telegraph, Harry, Wallop, The changeover, according to a blogger in The Economist, would likely require bank deposits to be converted from euros to the new currency and this prospect could lead to money leaving the country as well as Greek residents withdrawing cash from the banks, causing a bank run and necessitating capital controls.WEB,weblink Take the money and run, The Economist, 28 January 2015, 11 February 2015,

Administration and representation

{{Further|European Central Bank|Eurogroup|Euro summit}}File:Mário Centeno, Informal ECOFIN, 2016-09-10.jpg|thumb|left|upright|Eurogroup President Mário CentenoMário CentenoFile:Frankfurt EZB-Neubau.20130909.jpg|thumb|The European Central Bank (seat in Frankfurt depicted) is the supranational monetary authority of the eurozone.]]The monetary policy of all countries in the eurozone is managed by the European Central Bank (ECB) and the Eurosystem which comprises the ECB and the central banks of the EU states who have joined the eurozone. Countries outside the eurozone are not represented in these institutions. Whereas all EU member states are part of the European System of Central Banks (ESCB), non EU member states have no say in all three institutions, even those with monetary agreements such as Monaco. The ECB is entitled to authorise the design and printing of euro banknotes and the volume of euro coins minted, and its president is currently Mario Draghi.The eurozone is represented politically by its finance ministers, known collectively as the Eurogroup, and is presided over by a president, currently Mário Centeno. The finance ministers of the EU member states that use the euro meet a day before a meeting of the Economic and Financial Affairs Council (Ecofin) of the Council of the European Union. The Group is not an official Council formation but when the full EcoFin council votes on matters only affecting the eurozone, only Euro Group members are permitted to vote on it.Treaty of Lisbon (Provisions specific to member states whose currency is the euro), EurLex {{webarchive |url=https://web.archive.org/web/20090327080406weblink |date=27 March 2009 }}WEB, An economic government for the eurozone?, Federal Union,weblink 26 February 2011, dead,weblink" title="web.archive.org/web/20110717135636weblink">weblink 17 July 2011, weblink" title="web.archive.org/web/20090307190231weblink">Protocols, Official Journal of the European UnionSince the global financial crisis of 2007–08, the Euro Group has met irregularly not as finance ministers, but as heads of state and government (like the European Council). It is in this forum, the Euro summit, that many eurozone reforms have been decided upon. In 2011, former French President Nicolas Sarkozy pushed for these summits to become regular and twice a year in order for it to be a 'true economic government'.

Reform

In April 2008 in Brussels, European Commission President Jean-Claude Juncker suggested that the eurozone should be represented at the IMF as a bloc, rather than each member state separately: "It is absurd for those 15 countries not to agree to have a single representation at the IMF. It makes us look absolutely ridiculous. We are regarded as buffoons on the international scene".WEB, Eurozone countries should speak with one voice, Juncker says, Elitsa Vucheva, 15 April 2008, EU Observer,weblink 26 February 2011, In 2017 Juncker stated that he aims to have this agreed by the end of his mandate in 2019."Commission wants single eurozone seat at IMF plan adopted by end of mandate", Euractiv, 7 December 2017 However, Finance Commissioner Joaquín Almunia stated that before there is common representation, a common political agenda should be agreed upon.Leading EU figures including the Commission and national governments have proposed a variety of reforms to the eurozone's architecture; notably the creation of a Finance Minister, a larger eurozone budget, and reform of the current bailout mechanisms into either a "European Monetary Fund" or a eurozone Treasury. While many have similar themes, details vary greatly."Macron is right — the eurozone needs a finance minister", Financial Times, 28 September 2017Europe should have its own economy and finance minister, says EC, theguardian 6 December 2017"Large number of EU finance ministers want euro zone budget: Dijsselbloem", Reuters, 6 November 2017"Spain urges sweeping reforms on eurozone to correct flaws", Financial Times, 14 June 2017

Economy

(File:Eurozone. GNI PPP per capita, PPP (current international $) World bank 2017.png|thumb|Eurozone. GNI PPP per capita(current international $), World Bank 2017|400px)URLHTTPS://WWW.ECB.EUROPA.EU/MOPO/EAEC/HTML/INDEX.EN.HTML#FTN3_2_1, titleECB: Structure of the euro area economy, publisherEcb.europa.eu, date, accessdate20 May 2014, WEB, authorData, urweblink titleGDP, PPP (current international $) | Data | Table, publisherData.worldbank.org, date4 April 1985, accessdate20 May 2014, ">

Comparison table{| class"wikitable sortable"URLHTTPS://WWW.ECB.EUROPA.EU/MOPO/EAEC/HTML/INDEX.EN.HTML#FTN3_2_1, titleECB: Structure of the euro area economy, publisherEcb.europa.eu, date, accessdate20 May 2014, WEB, authorData, urweblink titleGDP, PPP (current international $) | Data | Table, publisherData.worldbank.org, date4 April 1985, accessdate20 May 2014,

WEB,weblink Report for Selected Countries and Subjects, www.imf.org, ! class="unsortable" |! Population(billions)(2018)! GDP PPP{{ref|reference_name_A|a}}(trillions USD)(2018)! Proportion of world GDP at PPP(2016)! Exports, % of GDP(2012)! Imports, % of GDP(2012)! (File:Logo European Central Bank.svg|22px) Eurozone| 0.34| 15| 11%| 27%| 25%! {{EU}}| 0.51| 22| 17%| 18%| 17%! {{USA}}| 0.33| 20| 16%| 14%| 17%! {{CHN}}| 1.40| 25| 18%| 26%| 24%! {{IND}}| 1.35| 11| 7%| 24%| 31%! {{JAP}}| 0.13| 6| 4%| 15%| 17%{{note|reference_name_A|a}} GDP in PPP, exports/imports of goods and services excluding intra-EU trade.{{Bar chart|float=none| title = Comparison of Economies| table_width = 70| bar_width = 45 | data_max = 22,000| label_type = EconomyNominal GDP (billions in USD) - Peak year as of 2019}}{{USA}} (Peak in 2019) > data1 = 21,345{{CHN}} (Peak in 2019) > data2 = 14,217(File:Logo European Central Bank.svg>22px) Eurozone (Peak in 2008) | data3 = 14,188{{JAP}} (Peak in 2012) > data4 = 6,203{{GBR}} (Peak in 2007) > data5 = 3,085{{IND}} (Peak in 2019) > data6 = 2,972{{BRA}} (Peak in 2011) > data7 = 2,614{{RUS}} (Peak in 2013) > data8 = 2,289{{CAN}} (Peak in 2013) > data9 = 1,847{{KOR}} (Peak in 2019) > data10 = 1,657{{AUS}} (Peak in 2012) > data11 = 1,569{{MEX}} (Peak in 2014) > data12 = 1,315{{IDN}} (Peak in 2019) > data13 = 1,101{{TUR}} (Peak in 2013) > data14 = 950{{SAU}} (Peak in 2018) > data15 = 782{{CHE}} (Peak in 2014) > data16 = 709{{ARG}} (Peak in 2017) > data17 = 643{{TWN}} (Peak in 2019) > data18 = 601{{POL}} (Peak in 2019) > data19 = 593{{SWE}} (Peak in 2013) > data20 = 57988%|The 20 largest economies in the world including Eurozone as a single entity, by Nominal GDP (2019) at their peak level of GDP in billions US$. The values for EU members that are not also eurozone members are listed both separately and as part of the EU.Figures from the April 2018 update of the International Monetary Fund's World Economic Outlook Database. weblink}}}}

Inflation

HICP figures from the ECB, taken from May of each year:{| style="vertical-align:top;"|
  • 2000: 1.7%
  • 2001: 3.1%
  • 2002: 2.0%
  • 2003: 1.8%
  • 2004: 2.5%|
  • 2005: 2.0%
  • 2006: 2.5%
  • 2007: 1.9%
  • 2008: 3.7%
  • 2009: 0.0%|
  • 2010: 1.7%
  • 2011: 2.7%
  • 2012: 2.4%
  • 2013: 0.9%
  • 2014: -0,2%|
  • 2015: 0.3%
  • 2016: -0.1%
  • 2017: 1.4%
  • 2018: N/A
  • 2019: N/A

Interest rates

Interest rates for the eurozone, set by the ECB since 1999. Levels are in percentages per annum. Between June 2000 and October 2008, the main refinancing operations were variable rate tenders, as opposed to fixed rate tenders. The figures indicated in the table from 2000 to 2008 refer to the minimum interest rate at which counterparties may place their bids.Key ECB interest rates {{webarchive |url=https://web.archive.org/web/20130811172454weblink |date=11 August 2013 }}, ECBFile:ECBrates.png|Eurozone interest rateinterest rate{| class="wikitable"! Date! Depositfacility! Mainrefinancingoperations! Marginallendingfacility| 1999-01-01| 2.00| 3.00| 4.50 1999-01-04The ECB announced on 22 December 1998 that, between 4 and 21 January 1999, there would be a narrow corridor of 50 base points interest rates for the marginal lending facility and the deposit facility in order to help the transition to the ECB's interest regime.| 2.75| 3.00| 3.25| 1999-01-22| 2.00| 3.00| 4.50| 1999-04-09| 1.50| 2.50| 3.50| 1999-11-05| 2.00| 3.00| 4.00| 2000-02-04| 2.25| 3.25| 4.25| 2000-03-17| 2.50| 3.50| 4.50| 2000-04-28| 2.75| 3.75| 4.75| 2000-06-09| 3.25| 4.25| 5.25| 2000-06-28| 3.25| 4.25| 5.25| 2000-09-01| 3.50| 4.50| 5.50| 2000-10-06| 3.75| 4.75| 5.75| 2001-05-11| 3.50| 4.50| 5.50| 2001-08-31| 3.25| 4.25| 5.25| 2001-09-18| 2.75| 3.75| 4.75| 2001-11-09| 2.25| 3.25| 4.25| 2002-12-06| 1.75| 2.75| 3.75| 2003-03-07| 1.50| 2.50| 3.50| 2003-06-06| 1.00| 2.00| 3.00| 2005-12-06| 1.25| 2.25| 3.25| 2006-03-08| 1.50| 2.50| 3.50| 2006-06-15| 1.75| 2.75| 3.75| 2006-08-09| 2.00| 3.00| 4.00| 2006-10-11| 2.25| 3.25| 4.25| 2006-12-13| 2.50| 3.50| 4.50| 2007-03-14| 2.75| 3.75| 4.75| 2007-06-13| 3.00| 4.00| 5.00| 2008-07-09| 3.25| 4.25| 5.25| 2008-10-08| 2.75|| 4.75| 2008-10-09| 3.25|| 4.25| 2008-10-15| 3.25| 3.75| 4.25| 2008-11-12| 2.75| 3.25| 3.75| 2008-12-10| 2.00| 2.50| 3.00| 2009-01-21| 1.00| 2.00| 3.00| 2009-03-11| 0.50| 1.50| 2.50| 2009-04-08| 0.25| 1.25| 2.25| 2009-05-13| 0.25| 1.00| 1.75| 2011-04-13| 0.50| 1.25| 2.00| 2011-07-13| 0.75| 1.50| 2.25| 2011-11-09| 0.50| 1.25| 2.00| 2011-12-14| 0.25| 1.00| 1.75| 2012-07-11| 0.00| 0.75| 1.50| 2013-05-08| 0.00| 0.50| 1.00| 2013-11-13| 0.00| 0.25| 0.75| 2014-06-11| -0.10| 0.15| 0.40| 2014-09-10| -0.20| 0.05| 0.30| 2015-12-09| -0.30| 0.05| 0.30| 2016-03-16| -0.40| 0.00| 0.25

Public debt

The following table states the ratio of public debt to GDP in percent for eurozone countries given by EuroStat.WEB,weblink General government gross debt - annual data (table code: teina225), Eurostat, 24 April 2018, The euro convergence criterion is 60%.{| cellpadding="1" class="wikitable sortable"! Country! 2007! 2009! 2010! 2011! 2015! 2016! 2017! 2018Eurozone >64.9}} {{no84.0}} {{no90.7}} {{no86.7}} {{no|85.1}}Austria}} {{no79.7}} {{no82.2}} {{no83.6}} {{no73.8}}Belgium}} {{no99.6}} {{no102.3}} {{no105.7}} {{no102.0}}Cyprus}} {{yes53.9}} {{yes65.8}} {{no107.1}} {{no102.5}}Estonia}} {{yes7.0}} {{yes5.9}} {{yes9.4}} {{yes8.4}}Finland}} {{yes41.7}} {{yes48.5}} {{no63.1}} {{no58.9}}France}} {{no79.0}} {{no85.2}} {{no96.5}} {{no98.4}}Germany}} {{no72.4}} {{no78.3}} {{no68.1}} {{no60.9}}Greece}} {{no126.7}} {{no172.1}} {{no180.8}} {{no181.1}}Ireland}} {{yes61.8}} {{no109.1}} {{no72.8}} {{no64.8}}Italy}} {{no112.5}} {{no116.5}} {{no132}} {{no132.2}}Latvia}} {{yes36.6}} {{yes42.8}} {{yes40.6}} {{yes35.9}}Lithuania}} {{yes29.0}} {{yes37.2}} {{yes40.1}} {{yes34.2}}Luxembourg}} {{yes16.0}} {{yes19.1}} {{yes20.8}} {{yes21.4}}Malta}} {{no67.8}} {{no69.9}} {{no57.6}} {{yes46.0}}Netherlands}} {{yes56.5}} {{yes61.7}} {{no61.8}} {{yes52.4}}Portugal}} {{no83.6}} {{no111.4}} {{no130.1}} {{no121.5}}Slovakia}} {{yes41.0}} {{yes43.3}} {{yes51.8}} {{yes48.9}}Slovenia}} {{yes36.0}} {{yes46.6}} {{no78.5}} {{no70.1}}Spain}} {{yes52.7}} {{no69.5 }} {{no99.0}} {{no97.1}}

Fiscal policies

{{see also|European Fiscal Compact}}File:Government surplus or deficit (EU-USA-UK).png|thumb|Comparison of government surplus/deficit (2001-2012) of eurozone, United States and United Kingdom]]The primary means for fiscal coordination within the EU lies in the Broad Economic Policy Guidelines which are written for every member state, but with particular reference to the 19 current members of the eurozone. These guidelines are not binding, but are intended to represent policy coordination among the EU member states, so as to take into account the linked structures of their economies.For their mutual assurance and stability of the currency, members of the eurozone have to respect the Stability and Growth Pact, which sets agreed limits on deficits and national debt, with associated sanctions for deviation. The Pact originally set a limit of 3% of GDP for the yearly deficit of all eurozone member states; with fines for any state which exceeded this amount. In 2005, Portugal, Germany, and France had all exceeded this amount, but the Council of Ministers had not voted to fine those states. Subsequently, reforms were adopted to provide more flexibility and ensure that the deficit criteria took into account the economic conditions of the member states, and additional factors.The Fiscal CompactNEWS, Nicholas Watt,weblink Lib Dems praise David Cameron for EU U-turn, The Guardian, 31 January 2012, 5 February 2012, London, WEB,weblink The fiscal compact ready to be signed, 31 January 2012, 5 February 2012, European Commission, dead,weblink" title="web.archive.org/web/20121022095150weblink">weblink 22 October 2012, dmy-all, (formally, the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union),NEWS,weblink RTÉ News, Referendum to be held on Fiscal Treaty, 28 February 2012, is an intergovernmental treaty introduced as a new stricter version of the Stability and Growth Pact, signed on 2 March 2012 by all member states of the European Union (EU), except the Czech Republic, the United Kingdom,NEWS,weblink EU summit: All but two leaders sign fiscal treaty, BBC News, 2 March 2012, 2 March 2012, and Croatia (subsequently acceding the EU in July 2013). The treaty entered into force on 1 January 2013 for the 16 states which completed ratification prior of this date.WEB,weblink Fiscal compact enters into force 21/12/2012 (Press: 551, Nr: 18019/12), European Council, 21 December 2012, 21 December 2012, As of 1 April 2014, it had been ratified and entered into force for all 25 signatories.Olivier Blanchard suggests that a fiscal union in the EZ can mitigate devastating effects of the single currency on the EZ peripheral countries. But he adds that the currency bloc will not work perfectly even if a fiscal transfer system is built, because, he argues, the fundamental issue about competitiveness adjustment is not tackled. The problem is, since the EZ peripheral countries do not have their own currencies, they are forced to adjust their economies by decreasing their wages instead of devaluation.Fiscal union will never fix a dysfunctional eurozone, warns ex-IMF chief Blanchard Mehreen Khan, The Daily Telegraph (London), 10 October 2015

Bailout provisions

{{see also|History of the euro#Recession era}}The financial crisis of 2007–08 prompted a number of reforms in the eurozone. One was a U-turn on the eurozone's bailout policy that led to the creation of a specific fund to assist eurozone states in trouble. The European Financial Stability Facility (EFSF) and the European Financial Stability Mechanism (EFSM) were created in 2010 to provide, alongside the International Monetary Fund (IMF), a system and fund to bail out members. However the EFSF and EFSM were temporary, small and lacked a basis in the EU treaties. Therefore, it was agreed in 2011 to establish a European Stability Mechanism (ESM) which would be much larger, funded only by eurozone states (not the EU as a whole as the EFSF/EFSM were) and would have a permanent treaty basis. As a result of that its creation involved agreeing an amendment to TEFU Article 136 allowing for the ESM and a new ESM treaty to detail how the ESM would operate. If both are successfully ratified according to schedule, the ESM would be operational by the time the EFSF/EFSM expire in mid-2013.In February 2016, the UK secured further confirmation that countries that do not use the Euro would not be required to contribute to bailouts for Eurozone countries.WEB, European Council meeting (18 and 19 February 2016) – Conclusions,weblink European Commission, 14 May 2016,

Peer review

{{see also|Euro Plus Pact}}In June 2010, a broad agreement was finally reached on a controversial proposal for member states to peer review each other's budgets prior to their presentation to national parliaments. Although showing the entire budget to each other was opposed by Germany, Sweden and the UK, each government would present to their peers and the Commission their estimates for growth, inflation, revenue and expenditure levels six months before they go to national parliaments. If a country was to run a deficit, they would have to justify it to the rest of the EU while countries with a debt more than 60% of GDP would face greater scrutiny.EU agrees controversial peer review of national budgets, EU ObserverThe plans would apply to all EU members, not just the eurozone, and have to be approved by EU leaders along with proposals for states to face sanctions before they reach the 3% limit in the Stability and Growth Pact. Poland has criticised the idea of withholding regional funding for those who break the deficit limits, as that would only impact the poorer states. In June 2010 France agreed to back Germany's plan for suspending the voting rights of members who breach the rules.Willis, Andrew (15 June 2010) Merkel: Spain can access aid if needed, EU Observer In March 2011 was initiated a new reform of the Stability and Growth Pact aiming at straightening the rules by adopting an automatic procedure for imposing of penalties in case of breaches of either the deficit or the debt rules.WEB,weblink Council reaches agreement on measures to strengthen economic governance, PDF, 18 May 2011, WEB, Jan Strupczewski,weblink EU finmins adopt tougher rules against debt, imbalance, Uk.finance.yahoo.com, Yahoo! Finance, 15 March 2011, 18 May 2011, {{dead link|date=May 2014}}

Criticism

Nobel prize-winning economist James Tobin thought that the euro project would not succeed without making drastic changes to European institutions, pointing out the difference between the US and the eurozone.J. Tobin, Policy Opinions, 31 (2001) Concerning monetary policies, the US central bank FRB aims at both growth and reducing unemployment, while the ECB tends to give its first priority to price stability under Bundesbank's supervision. As the price level of the currency bloc is kept low, the unemployment level of the region has become higher than that of US since 1982.{{see also|Phillips curve|Nominal rigidity}}When it comes to fiscal policies, 12 percent of the US federal budget is used for transfers to states and local governments. Also, when a state has financial or economic difficulties, a fair amount of money is automatically transferred to the state. The US government does not impose restrictions on state budget policies. This is different from the fiscal policies of the eurozone, where Treaty of Maastricht requires each eurozone member country to run its budget deficit smaller than 3 percent of its GDP.In February 2019, a study from the Centre for European Policy 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 authors argued that this was down to its effect on competitiveness; usually countries would devalue their currencies to make their exports cheaper on the world market but this was not possible due to the common currency.Nicole Ng, "CEP study: Germans gain most from euro introduction", Deutsche Welle, 25/02/19, accessed 05/03/19

Economic policemen

In 1997, Arnulf Baring expressed concern that the European Monetary Union would make Germans the most hated people in Europe. Baring suspected the possibility that the people in Mediterranean countries would regard Germans and the currency bloc as economic policemen.This Prediction about the Euro Deserves a ‘Nostradamus Award’ W. Richter, Wolf Street, 16 July 2015

See also

Notes

{{reflist|group=lower-alpha|30em|refs ={{efn|name=status|{{Kosovo-note}}}}}}

References

{{reflist|30em}}

External links

{{commons category|Eurozone}}{{wikisource|Consolidated version of the Treaty on the Functioning of the European Union/Title VIII: Economic and Monetary Policy}} {{Euro topics|state=expanded}}{{European Union topics|state=collapsed}}{{Europe topics (small)|state=collapsed}}{{Authority control}}

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