The “Eurozone” is officially known as the “euro-area” and consists of those Member States of the EU that have adopted the Euro as their currency. Today, around 340 million citizens in 19 countries live in the euro-area, and this number will increase as future enlargements of the euro-area continue to spread the single currency more widely in the European Union.
The Euro is not the currency of all EU member states and the UK and Denmark have an opt-out clause, in the treaty, which exempts them from participation.
Sweden has not yet qualified to be part of the euro-area and the remaining member states (having joined the EU after the introduction of the Euro) have committed to joining as and when they meet the necessary conditions for entry.
Andorra, Monaco San Marino and the Vatican City have adopted the Euro as their national currency by special arrangement with the EU.
The Euro was created because a single currency offers many advantages and benefits over the previous situation where each Member State had its own currency. Not only are fluctuation risks and exchange costs eliminated and the single market strengthened, but the Euro also means closer co-operation among Member States for a stable currency and economy.
The single currency brings new strengths and opportunities arising from the integration and scale of the euro-area economy, making the single market more efficient.
Before the Euro, the need to exchange currencies meant extra costs, risks and a lack of transparency in cross-border transactions. With the single currency, doing business in the euro-area is more cost-effective and less risky.
Being able to compare prices easily encourages cross-border trade and investment, from individual consumers searching for the lowest cost product, through businesses purchasing the best value service, to large institutional investors who can invest more efficiently throughout the euro-area without the risks of fluctuating exchange rates.
The scale of the single currency and the euro-area also brings new opportunities in the global economy. A single currency makes the euro-area an attractive region for other countries to do business with, promoting trade and investment.
The Euro is managed by the European Central Bank (ECB) and
- Sets the interest rates at which it lends to banks in the eurozone
- Manages the eurozone’s foreign currency reserves and the buying or selling of currencies to balance exchange rates
- Ensures that financial markets & institutions are well supervised by national authorities, and that payment systems work well
- Ensures the safety and soundness of the European banking system
- Authorises production of euro banknotes by eurozone countries
- Monitors price trends and assesses risks to price stability
More details about the Euro and Eurozone can be found at