Thursday, August 28, 2014

Latvia Joins the Eurozone (map)

This article was originally published as "Map: Which Countries Use the Euro? (Plus: This Year's New Addition)". To see newer versions of the map, view all Eurozone articles on PolGeoNow.

Map of the Eurozone (euro area), showing which countries use the euro as their currency. Includes members, pre-members (ERM II), EU non-members using the euro, and other EU countries (colorblind accessible).
The Eurozone, European Union, and other countries using the euro.
Map by Evan Centanni, from blank map by Ssolbergj. License: CC BY-SA
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Article by Caleb Centanni

Eurozone Adds New Member
The Eurozone, an economic union of states in the European Union (EU) that have adopted the euro as their currency, added its eighteenth member in January. This is the organization’s first new admission since Estonia joined in 2011.

Latvia, a small former-Soviet republic in the Baltic Region, officially adopted the euro on January 1, 2014. Latvia has had one of Europe’s fastest growing economies in recent years, and this swift recovery from the recent recession helped it meet the Eurozone’s criteria for 2014. Latvia’s adoption of the euro was approved by the country’s parliament in January 2013, despite polls showing public opinion on the decision with less than 50 percent in favor.

The European Central Bank, the governing financial body of the Eurozone, is headquartered in Frankfurt, Germany. Germany, along with eleven other EU countries, became a founding member of the Eurozone in 1999. Since then, seven more members have joined after meeting the five necessary economic criteria. This has brought the total to eighteen members, comprising all but ten of the 28 European Union member states.

Map of the European Union (EU) and prospective member countries
The EU and prospective members
Two more countries, Denmark and Lithuania, are members of the European Exchange Rate Mechanism (ERM II), which ties members’ currency to the euro and is a necessary step for joining the Eurozone. However, Denmark is allowed to opt out of adopting the euro, despite its ERM II membership. All members of the European Union were required by the Maastricht Treaty of 1992 to change to the euro after meeting the criteria. However, both Denmark and the UK negotiated exceptions to the requirement later in that year. Seven other EU members are still required to adopt the euro in the future.

There are also four small states outside of the EU - Andorra, Monaco, San Marino, and Vatican City -which have monetary agreements allowing them to use the euro as their official currency. Meanwhile two other EU non-members, Montenegro and the disputed state of Kosovo, have unilaterally adopted the euro without coming to any agreement with the Central Bank. The EU has expressed its dissatisfaction with these unilateral adoptions, but the currency’s use in the two states has gone forward anyway.

Many countries sought Eurozone membership at the beginning of the financial crisis in 2008, but most became less interested after the euro was hit by its own crisis in 2009. Meanwhile, recent Danish polls suggest the country is unlikely to support moving to the new currency any time soon. However, Latvia’s neighbor Lithuania is still scheduled to join in 2015.