The European Union

THE EUROPEAN UNION

Lesson 6
How do individuals, businesses and economies
benefit from using the Euro?
 The European Union

The Euro
€ In 1999, the euro area was established as a
currency in eleven of the then fifteen EU
Member States.

€ Of the 27 EU Member States today, seventeen

have adopted the euro. Estonia is the most
recent member, having joined in Jan. 2011.

€ One of the striking benefits of a single

European currency are low interest rates due
to a high degree of price stability.

€ The euro is as stable and credible as the best-

performing currencies previously used in the
euro area countries.
 The European Union

Before the Euro

a multitude of currencies
Diversity of currencies:

• Cumbersome inter-state trading

• Comparing prices more difficult
• Currency exchange can be unpredictable
in contracts/ loans
 The European Union

The Euro
a single currency for Europeans

The 12 countries which introduced

the Euro in 2001:

• Austria • Italy
• Belgium • Ireland
• Finland • Luxembourg
• France • Netherlands
• Germany • Portugal
• Greece • Spain
 The European Union

The Euro
a single currency for Europeans

Can be used everywhere in the euro area

Coins: one side with national symbols,

one side common

Notes: no national side

New Euro countries since 2001:

EU countries using the euro in 2011
EU countries part of ERM II (in between) • Cyprus (2006) •Slovenia (2009)
EU countries not using the euro • Malta (2006) • Estonia (2011)
• Slovakia (2008)
 The European Union

Some of the Euro’s benefits

• International • European Central
trade is Bank keeps price
facilitated inflation low so
interest rates also
remain low
• Inflation remains
low and stable • Currency
exchange costs
are eliminated

• Travelling is made
easier

• Comparing prices
is made simpler
 The European Union

United in Diversity - The €uro

 The European Union

United in Diversity - The €uro

 The European Union

European Central Bank

• The European Central Bank (ECB) is the
central bank for Europe's single currency,
the euro.
• The ECB’s main task is to maintain the euro's
purchasing power and thus price stability in
the euro area.
• The euro area comprises the 17 European
The euro was introduced in 1999 Union countries that have introduced the
euro since 1999.
• The ECB operates independently from
Member State governments.