I was recently asked what exactly is the EuroZone. Why not just say Europe or any specific nation or nations the topic covers? I then was intrigued as all I could explain about the EuroZone was that it relates only to those countries who use the Euro as their currency.
This definition though is rather narrow or broad depending on your view of things (a la glass half full, half empty, or too much glass). The EuroZone includes those countries in that use the Euro has their sole currency. Such countries that have done this are Austria, Belgium, France, and Germany, among others.
In order to enter the EuroZone, a country must first adopt the Euro alongside its own currency and is monitored by the European Exchange Rate Mechanism. The Euro is monitored and regulated broadly by the European Central Bank. The European Central Bank can loosely be related to the United States Treasury (but as with many international relationships, the laws and regulations vary by region). Interest Rates and Inflation are paramount as the recent financial crisis has been argued as proof of the lack of regulation or oversight though others argue that how regulations are measured and implemented is key.
Here are a couple of articles with more information on the EuroZone and the European Central Bank:
Posts
