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EUROZONE

The EU started in 1993 in Maastricht Holland which also is one of the founding members of the Union, together with 5 other countries Germany, France, Italy, Belgium and Luxembourg. The European Union has only expanded with more and more countries and now there are 27 European countries which are members of the economic and political cooperation.

The EU cooperation does have a lot of impact on around a ½ billion people’s lives, because there are so many rules every member country has to follow to be a part of the cooperation.

We in Denmark are a part of the European Union and therefore it has a huge effect on our daily lives as citizens, for the Danish business and for the politicians who have to make some decisions on behalf of Denmark.

The common European currency is named Euro, and was founded to promote growth, stability and economic integration in Europe. The Euro is the currency of 19 out of 27 member countries. These countries who have Euro as currency together constitute the Eurozone, and is officially called the Euro area. With the Euro as the common currency it makes it safer, cheaper and more uncomplicated for businesses to sell and buy within the Eurozone and to trade with the rest of the world.

The Euro is the currency of EMU - which means economic and monetary Union, but the member States are subject to a number of economic policy requirements. The euro was introduced in 1999, but Denmark has a legal relationship and does not want to be a part of the Eurozone. The Eurozone is a common name for the countries that have formed a monetary union that introduced the Euro as a currency.

The benefit of the Euro is that it makes it easy to compare the prices, but also makes a bigger impact on the global economy. Denmark does not need to be a part of the Eurozone, because of the Euro reservation.

Denmark is a part of the second phase of EMU, which means that the Nationalbanken (The Danish National Bank) deals with ECB (The European Central Bank). Therefore, the Danish currency’s (DKK) exchange rate follows the exchange rate of the euro- the Exchange Rate Mechanism. But Denmark is not a part of the third phase, that is about the Euro. The disadvantage is that by having Euro in Denmark we lose the right to control the exchange rate.

If the Euro currency collapsed it would compromise the Schengen Area, named after the Schengen Agreement. The Schengen Area is an area that includes 26 member countries who have abolished everything with passport and border control. Under this agreement every 26 countries allowed free movement of people, goods and services within the borders of the Eurozone. An end to the Euro will make it easier to disorganize and simply put an end to the whole EU experiment.

In 2012, there was a financial crisis in Greece, because Greece considered leaving the Eurozone and return to their own currency Drachma as their official currency. This was called “Grexit'' which is an abbreviation of Greece exit. Greece was affected by the great recession, and the many years of indebtedness, and cost deficit in the central government accounts. Many experts and citizens reflected the idea of returning their own currency to make a solution to their debt problem.

In our opinion, the Euro should be set as the currency of the countries where the economy is weak, but in Denmark it does not make any sense to exchange the Danish currency to Euro, when we already have a well functional economic prosperity.