2. THE EUROZONE
The eurozone, officially called the euro area, is a monetary union of 19 of the 27 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 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.
– Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain (all in 1998), Greece (2000), Slovenia (2007), Cyprus (2008), Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), and Lithuania (2015).
– The danish krone was left at that time as the only participant member.
APPLIED FOR ERM II
OTHER EU MEMBER
– Not in ERM II, but obliged to join the eurozone on meeting convergence criteria, Czech Republic, Hungary, Poland, Romania, and Sweden. United Kingdom since 31 of January of 2020 is not anymore a EU member (Brexit).
– The euro is also used in countries outside the EU, four states – Andorra in 01.01.2002 with issuing rights in 01.07.2013, Monaco, San Marino, and Vatican City in 01.01.1999 with issuing rights in 01.01.2002 — had 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.
Kosovo and Montenegro officially adopted in 01.01.2002 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.
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:
Akrotiri and Dhekelia (British territory, with Cyprus ensuring eurozone laws are implemented, adopted 2008-01-01, replacing cypriot pound)
Collectivity of Saint Martin (French territory, with France ensuring eurozone laws are implemented)
Territorial collectivity of Saint Barthélemy (French territory, with France ensuring eurozone laws are implemented)
Overseas Collectivity of Saint-Pierre and Miquelon (French territory, with France ensuring eurozone laws are implemented)
French Southern and Antarctic Lands (French territory, with France ensuring eurozone laws are implemented)