The Economic and Monetary Union (EMU) encompasses all Member States of the European Union, fostering economic policy coordination to achieve the EU’s economic objectives. Within this broader framework, a significant number of Member States have deepened their integration by adopting a single currency, the euro, replacing their national currencies. These nations collectively constitute the Euro Zone, also frequently referred to as the euro area.
Initially launched in 1999 as ‘book money’, the euro zone comprised 11 out of the then 15 EU Member States. Greece joined in 2001, preceding the cash changeover by a year. Subsequent enlargements saw Slovenia (2007), Cyprus and Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), Lithuania (2015), and most recently, Croatia in 2023, embrace the euro. Currently, the euro zone encompasses 20 EU Member States, representing a core of economic integration within Europe.
However, not all EU members are part of the euro zone. Denmark, for instance, possesses a formal ‘opt-out’ from euro zone membership, a provision outlined in a Protocol annexed to the EU Treaty. This allows Denmark the flexibility to decide on its future participation. Sweden, while not having an opt-out, has not yet fulfilled the necessary criteria for euro zone entry.
The remaining EU Member States outside the euro zone primarily consist of countries that joined the Union in the 2004, 2007, and 2013 expansions, subsequent to the euro’s introduction. Upon their accession, these nations did not immediately meet the conditions for euro zone membership. Nevertheless, they are committed to adopting the euro once they satisfy the convergence criteria. These Member States operate under a ‘derogation’, similar in status to Sweden in their commitment to future euro adoption.
Beyond EU borders, several microstates – Andorra, Monaco, San Marino, and the Vatican City – have also adopted the euro as their official currency. This adoption is formalized through specific monetary agreements with the EU. These states are permitted to issue their own euro coins, albeit within defined limits. Despite their euro adoption, they are not classified as part of the euro zone due to their non-EU Member State status.
