Definitions

What is Eurozone/concept/elaboration

The European Union was born with a great purpose : to increase ties between European nations and, consequently, to avoid the historic conflicts that have plagued the continent for centuries. This general principle was consolidated with a series of actions: a parliament to legislate in relation to common interests, the free movement of citizens and a single currency, in this case the euro. However, not all countries that make up the European Union share the same currency. In this way, there are two blocks of countries that can be differentiated: those that use the euro as their currency and those that do not. The first case deals with the Eurozone, also known as the Eurozone.

The European Central Bank is the entity that governs the economy of countries in the euro zone and its main function is to maintain the purchasing power of the euro and achieve price stability as a common currency.

Eurozone Development

Having a single European currency means a tool to promote territorial, economic, financial and human cohesion in European countries. What we know as the eurozone was an important step that officially began in 1999 and is made up of a total of 11 countries. In the following years, other countries were incorporated and today it has a total of 19 states.

There is a project for the eurozone to be expanded in the coming years. However, currently, there are nations that do not intend to be part of the eurozone, such as Denmark and Great Britain.

Conditions for joining the eurozone

The legislative power of each European Union country diminishes as Europe and its institutions advance. For this advance to be homogeneous, it is necessary to establish a series of requirements that must meet all nations that have the desire to integrate this common space. In relation to the criteria for admission to the eurozone, the most relevant are the following:

1) control the inflation rate (of consumer prices);

2) maintain a budget deficit below 3% of GDP;

3) control public debts;

4) monitor interest rates in a stable manner.

These requirements mean that no eurozone country can act according to its own financial criteria. These and other requirements are not always easy to comply with, especially in situations of economic recession where there is an increase in public debt to meet the social needs of member states.

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