61-632: The Oesterreichische Nationalbank ( OeNB , lit. ' Austrian National Bank ' ) is the Austrian member of the Eurosystem and was the monetary authority for Austria from 1923 to 1938 and from 1945 to 1998, issuing the Austrian schilling . It started operations on 1 January 1923 under the economic assistance provided to Austria by the Economic and Financial Organization of
122-509: A country was to run a deficit, they would have to justify it to the rest of the EU while countries with a debt more than 60% of GDP would face greater scrutiny. The plans would apply to all EU members, not just the eurozone, and have to be approved by EU leaders along with proposals for states to face sanctions before they reach the 3% limit in the Stability and Growth Pact . Poland has criticised
183-634: A day before a meeting of the Economic and Financial Affairs Council (Ecofin) of the Council of the European Union . The Group is not an official Council formation but when the full EcoFin council votes on matters only affecting the eurozone, only Euro Group members are permitted to vote on it. Since the global financial crisis of 2007–2008 , the Euro Group has met irregularly not as finance ministers, but as heads of state and government (like
244-547: A fiscal union in the eurozone can mitigate devastating effects of the single currency on the eurozone peripheral countries. But he adds that the currency bloc will not work perfectly even if a fiscal transfer system is built, because, he argues, the fundamental issue about competitiveness adjustment is not tackled. The problem is, since the eurozone peripheral countries do not have their own currencies, they are forced to adjust their economies by decreasing their wages instead of devaluation. The financial crisis of 2007–2008 prompted
305-519: A minimum of two years without the presence of "severe tensions" for the currency exchange rate. In September 2011, a diplomatic source close to the euro adoption preparation talks with the seven remaining new member states who had yet to adopt the euro at that time (Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania, Poland, and Romania), claimed that the monetary union (eurozone) they had thought they were going to join upon their signing of
366-594: A new stricter version of the Stability and Growth Pact , signed on 2 March 2012 by all member states of the European Union (EU), except the Czech Republic, the United Kingdom, and Croatia (subsequently acceding the EU in July 2013). The treaty entered into force on 1 January 2013 for the 16 states which completed ratification prior of this date. As of 1 April 2014, it had been ratified and entered into force for all 25 signatories. Olivier Blanchard suggests that
427-584: A number of reforms in the eurozone. One was a U-turn on the eurozone's bailout policy that led to the creation of a specific fund to assist eurozone states in trouble. The European Financial Stability Facility (EFSF) and the European Financial Stability Mechanism (EFSM) were created in 2010 to provide, alongside the International Monetary Fund (IMF), a system and fund to bail out members. However,
488-455: A result of the financial crisis of 2007–2008 . In Iceland, there was an increase in interest in joining the European Union, a pre-condition for adopting the euro. However, by 2010 the debt crisis in the eurozone caused interest from Poland, as well as the Czech Republic, Denmark and Sweden to cool. In the opinion of journalist Leigh Phillips and Locke Lord 's Charles Proctor, there is no provision in any European Union treaty for an exit from
549-482: Is common representation, a common political agenda should be agreed upon. Leading EU figures including the commission and national governments have proposed a variety of reforms to the eurozone's architecture; notably the creation of a Finance Minister, a larger eurozone budget, and reform of the current bailout mechanisms into either a "European Monetary Fund" or a eurozone Treasury . While many have similar themes, details vary greatly. The 20 largest economies in
610-836: Is distinct from the European System of Central Banks (ESCB), which comprises the ECB and the central banks of all 27 European Union member states, including those that are not part of the eurozone. In accordance with the treaty establishing the European Community and the Statute of the European System of Central Banks and of the European Central Bank , the primary objective of the Eurosystem
671-459: Is entitled to authorise the design and printing of euro banknotes and the volume of euro coins minted, and its president is currently Christine Lagarde . The eurozone is represented politically by its finance ministers, known collectively as the Eurogroup , and is presided over by a president, currently Paschal Donohoe . The finance ministers of the EU member states that use the euro meet
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#1732775379128732-496: Is legally exempt from joining the eurozone unless its government decides otherwise, either by parliamentary vote or referendum . The United Kingdom likewise had an opt-out prior to withdrawing from the EU in 2020. The remaining six countries are obliged to adopt the euro in future, although the EU has so far not tried to enforce any time plan. They should join as soon as they fulfill the convergence criteria, which include being part of ERM II for two years. Sweden , which joined
793-512: Is political and in a state of flux in terms of what further provisions will be agreed for eurozone change. No eurozone member state has left, and there are no provisions to do so or to be expelled. In 1998, eleven member states of the European Union had met the euro convergence criteria , and the eurozone came into existence with the official launch of the euro (alongside national currencies) on 1 January 1999 in those countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg,
854-557: Is responsible for fiscal and monetary cooperation between eurozone and non-eurozone EU members. The European Central Bank (ECB) makes monetary policy for the eurozone, sets its base interest rate , and issues euro banknotes and coins. Since the financial crisis of 2007–2008 , the eurozone has established and used provisions for granting emergency loans to member states in return for enacting economic reforms. The eurozone has also enacted some limited fiscal integration ; for example, in peer review of each other's national budgets. The issue
915-531: Is responsible for payment systems oversight. Furthermore, the OeNB operates a payment system for the euro, promotes knowledge and understanding among the general public and decision makers owing to its comprehensive communication policy, and supports research in Austria. 48°12′58″N 16°21′15″E / 48.21611°N 16.35417°E / 48.21611; 16.35417 Eurosystem The Eurosystem
976-419: Is the monetary authority of the eurozone , the collective of European Union member states that have adopted the euro as their sole official currency. The European Central Bank (ECB) has, under Article 16 of its Statute, the exclusive right to authorise the issuance of euro banknotes . Member states can issue euro coins , but the amount must be authorised by the ECB beforehand. The Eurosystem consists of
1037-460: Is to maintain price stability. Without prejudice to this objective, the Eurosystem supports the general economic policies in the Community and acts in accordance with the principles of an open market economy. The basic tasks carried out by the Eurosystem are (art. 127 TFEU): In addition, the Eurosystem contributes to the smooth conduct of policies pursued by the competent authorities relating to
1098-555: Is to not exceed 60%. The primary means for fiscal coordination within the EU lies in the Broad Economic Policy Guidelines which are written for every member state, but with particular reference to the 20 current members of the eurozone. These guidelines are not binding, but are intended to represent policy coordination among the EU member states, so as to take into account the linked structures of their economies. For their mutual assurance and stability of
1159-693: The Czech Republic , Denmark , Hungary , Poland , Romania , and Sweden ) are EU members but do not use the euro. Before joining the eurozone, a state must spend at least two years in the European Exchange Rate Mechanism (ERM II). As of January 2023, the central bank of Denmark and the Bulgarian central bank participate in ERM II. Denmark obtained a special opt-out in the original Maastricht Treaty , and thus
1220-879: The European Monetary System with its Exchange Rate Mechanism and the related new common currency ECU . On 1 January 1999, the euro replaced the ECU ;1:1 at the exchange rate markets. During 1979–1999, the Deutsche Mark functioned as a de facto anchor for the ECU, meaning there was only a minor difference between pegging a currency against the ECU and pegging it against the Deutsche Mark. Sources: EC convergence reports 1996-2014 , Italian lira , Spanish peseta , Portuguese escudo , Finnish markka , Greek drachma , Sterling The eurozone
1281-518: The IMF as a bloc, rather than each member state separately: "It is absurd for those 15 countries not to agree to have a single representation at the IMF. It makes us look absolutely ridiculous. We are regarded as buffoons on the international scene". In 2017 Juncker stated that he aims to have this agreed by the end of his mandate in 2019. However, Finance Commissioner Joaquín Almunia stated that before there
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#17327753791281342-398: The main refinancing operations were variable rate tenders, as opposed to fixed rate tenders. The figures indicated in the table from 2000 to 2008 refer to the minimum interest rate at which counterparties may place their bids. [REDACTED] The following table states the ratio of public debt to GDP in percent for eurozone countries given by EuroStat. The euro convergence criterion
1403-586: The Council of Ministers had not voted to fine those states. Subsequently, reforms were adopted to provide more flexibility and ensure that the deficit criteria took into account the economic conditions of the member states, and additional factors. The Fiscal Compact (formally, the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union), is an intergovernmental treaty introduced as
1464-563: The Dutch government, favour the creation of an expulsion provision for the case whereby a heavily indebted state in the eurozone refuses to comply with an EU economic reform policy. In a Texas law journal, University of Texas at Austin law professor Jens Dammann has argued that even now EU law contains an implicit right for member states to leave the eurozone if they no longer meet the criteria that they had to meet in order to join it. Furthermore, he has suggested that, under narrow circumstances,
1525-422: The ECB and the national central banks (NCB) of the 20 member states that are part of the eurozone. The national central banks apply the monetary policy of the ECB. The primary objective of the Eurosystem is price stability . Secondary objectives are financial stability and financial integration. The mission statement of the Eurosystem says that the ECB and the national central banks jointly contribute to achieving
1586-521: The EFSF and EFSM were temporary, small and lacked a basis in the EU treaties. Therefore, it was agreed in 2011 to establish a European Stability Mechanism (ESM) which would be much larger, funded only by eurozone states (not the EU as a whole as the EFSF/EFSM were) and would have a permanent treaty basis . As a result of that its creation involved agreeing an amendment to TEFU Article 136 allowing for
1647-555: The ESCB to perform its tasks. 2023 2022 2023 2022 ts Eurozone The euro area , commonly called the eurozone ( EZ ), is a currency union of 20 member states of the European Union (EU) that have adopted the euro ( € ) as their primary currency and sole legal tender , and have thus fully implemented EMU policies. The 20 eurozone members are: The seven non-eurozone members of
1708-549: The ESM and a new ESM treaty to detail how the ESM would operate. If both are successfully ratified according to schedule, the ESM would be operational by the time the EFSF/EFSM expire in mid-2013. In February 2016, the UK secured further confirmation that countries that do not use the Euro would not be required to contribute to bailouts for eurozone countries. In June 2010, a broad agreement
1769-439: The EU have adopted the euro, with France ensuring eurozone laws are implemented: The euro is also used in countries outside the EU. Four states (Andorra, Monaco, San Marino, and Vatican City) have signed formal agreements with the EU to use the euro and issue their own coins. Nevertheless, they are not considered part of the eurozone by the ECB and do not have a seat in the ECB or Euro Group. Akrotiri and Dhekelia (located on
1830-491: The EU are Bulgaria , the Czech Republic , Denmark , Hungary , Poland , Romania , and Sweden . They continue to use their own national currencies, although all but Denmark are obliged to join once they meet the euro convergence criteria . Among non-EU member states, Andorra , Monaco , San Marino , and Vatican City have formal agreements with the EU to use the euro as their official currency and issue their own coins. In addition, Kosovo and Montenegro have adopted
1891-667: The EU in 1995 after the Maastricht Treaty was signed, is required to join the eurozone. However, the Swedish people turned down euro adoption in a 2003 referendum and since then the country has intentionally avoided fulfilling the adoption requirements by not joining ERM II, which is voluntary. Bulgaria joined ERM II on 10 July 2020. Interest in joining the eurozone increased in Denmark, and initially in Poland, as
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1952-500: The EU in 2013 , adopted the euro in 2023. All new EU members joining the bloc after the signing of the Maastricht Treaty in 1992 are obliged to adopt the euro under the terms of their accession treaties. However, the last of the five economic convergence criteria which need first to be complied with in order to qualify for euro adoption, is the exchange rate stability criterion, which requires having been an ERM-member for
2013-548: The European Council). It is in this forum, the Euro summit , that many eurozone reforms have been decided upon. In 2011, former French President Nicolas Sarkozy pushed for these summits to become regular and twice a year in order for it to be a 'true economic government'. In April 2008 in Brussels , future European Commission President Jean-Claude Juncker suggested that the eurozone should be represented at
2074-668: The European Union , the Council of the European Union addressed the monetary agreements France had with the CFA Zone and Comoros, and ruled that the ECB had no obligation towards the convertibility of the CFA and Comorian francs . The responsibility of the free convertibility remained in the French Treasury . Kosovo and Montenegro unilaterally adopted the euro as their sole currency without an agreement and, therefore, have no issuing rights. These states are not considered part of
2135-561: The European Union can expel member states from the eurozone. The monetary policy of all countries in the eurozone is managed by the European Central Bank (ECB) and the Eurosystem which comprises the ECB and the central banks of the EU states who have joined the eurozone. Countries outside the eurozone are not represented in these institutions. Whereas all EU member states are part of the European System of Central Banks (ESCB), non EU member states have no say in all three institutions, even those with monetary agreements such as Monaco. The ECB
2196-472: The Eurozone, safeguarding financial stability in Austria and supplying the general public and the business community in Austria with high-quality, i.e. counterfeit-proof, cash. In addition, the OeNB manages reserve assets, i.e. gold and foreign exchange holdings, with a view to backing the euro in times of crisis, draws up economic analyses, compiles statistical data, is active in international organizations and
2257-781: The League of Nations , replacing the Austro-Hungarian Bank with its name recalling that of the Austro-Hungarian Bank's predecessor entity founded in 1816. It was liquidated following the Anschluss in March 1938, and re-established in July 1945. The OeNB is a joint-stock corporation governed by special legislative provision. Its entire capital of €12 million has been held by the Austrian federal government since May 2010, with shareholder rights exercised by
2318-658: The Minister of Finance. Before 2010, half of the capital was in the hands of employer and employee organizations as well as banks and insurance corporations. The Oesterreichische Nationalbank was established under the conditions of the stabilization loan coordinated by the Economic and Financial Organization of the League of Nations in 1922–23. The bank's statutes were drafted by the League's Financial Committee and enacted in Austrian legislation on 14 November 1922. The new institution started operations on 1 January 1923. It took over
2379-578: The Netherlands, Portugal, and Spain. Greece qualified in 2000 and was admitted on 1 January 2001. These twelve founding members introduced physical euro banknotes and euro coins on 1 January 2002. After a short transition period, they took out of circulation and rendered invalid their pre-euro national coins and notes. Between 2007 and 2023, eight new states have acceded: Croatia, Cyprus, Estonia, Latvia, Lithuania, Malta, Slovakia, and Slovenia. Three French dependent territories that are not part of
2440-500: The US since 1982. Concerning fiscal policies, 12% of the US federal budget is used for transfers to states and local governments. The US government does not impose restrictions on state budget policies, whereas the Treaty of Maastricht requires each eurozone member country to keep its budget deficit below 3% of its GDP. In 2008, a study by Alberto Alesina and Vincenzo Galasso found that
2501-419: The accession treaty may very well end up being a very different union, entailing a much closer fiscal, economic, and political convergence than originally anticipated. This changed legal status of the eurozone could potentially cause them to conclude that the conditions for their promise to join were no longer valid, which "could force them to stage new referendums" on euro adoption. Seven countries ( Bulgaria ,
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2562-624: The adoption of euro promoted market deregulation and market liberalization . Furthermore, the euro was also linked to wage moderation, as wage growth slowed down in countries that adopted the new currency. Oliver Hart , who received the Nobel Memorial Prize in Economic Sciences in 2016, criticized the euro, calling it a "mistake" and emphasising his opposition to monetary union since its inception. He also expressed opposition to European integration , arguing that
2623-847: The currency in the face of growing overvaluation. This contributed to a substantial contraction in Austrian GDP. Following the Anschluss in 1938, the Austrian National Bank's was liquidated, and its shareholders were forced to accept German government bonds in exchange for their shares. Its operations were taken over by the Reichsbank and became the latter's Vienna branch, and the Reichsmark became Austria's currency by German decree of 17 March 1938. The former National Bank's gold holdings and foreign currency reserves were moved to Berlin. The Oesterreichische Nationalbank
2684-412: The currency, members of the eurozone have to respect the Stability and Growth Pact , which sets agreed limits on deficits and national debt , with associated sanctions for deviation. The Pact originally set a limit of 3% of GDP for the yearly deficit of all eurozone member states; with fines for any state which exceeded this amount. In 2005, Portugal, Germany, and France had all exceeded this amount, but
2745-640: The deficit or the debt rules. In 1997, Arnulf Baring expressed concern that the European Monetary Union would make Germans the most hated people in Europe. Baring suspected the possibility that the people in Mediterranean countries would regard Germans and the currency bloc as economic policemen. In 2001, James Tobin thought that the euro project would not succeed without making drastic changes to European institutions, pointing out
2806-506: The difference between the US and the eurozone. Concerning monetary policies, the system of Federal Reserve banks in the US aims at both growth and reducing unemployment, while the ECB tends to give its first priority to price stability under the Bundesbank 's supervision. As the price level of the currency bloc is kept low, the unemployment level of the region has become higher than that of
2867-407: The euro unilaterally, relying on euros already in circulation rather than minting currencies of their own. These six countries, however, have no representation in any eurozone institution. The Eurosystem is the monetary authority of the eurozone, the Eurogroup is an informal body of finance ministers that makes fiscal policy for the currency union, and the European System of Central Banks
2928-413: The eurozone by the ECB. However, sometimes the term eurozone is applied to all territories that have adopted the euro as their sole currency. Further unilateral adoption of the euro ( euroisation ), by both non-euro EU and non-EU members, is opposed by the ECB and EU. The chart below provides a full summary of all applying exchange-rate regimes for EU members , since the birth, on 13 March 1979, of
2989-595: The eurozone should be included in the relevant treaties. On the issue of leaving the eurozone, the European Commission has stated that "[t]he irrevocability of membership in the euro area is an integral part of the Treaty framework and the Commission, as a guardian of the EU Treaties, intends to fully respect [that irrevocability]." It added that it "does not intend to propose [any] amendment" to
3050-503: The eurozone. In fact, they argued, the Treaties make it clear that the process of monetary union was intended to be "irreversible" and "irrevocable". However, in 2009, a European Central Bank legal study argued that, while voluntary withdrawal is legally not possible, expulsion remains "conceivable". Although an explicit provision for an exit option does not exist, many experts and politicians in Europe have suggested an option to leave
3111-436: The former Austrian-territory branches and operations of the Austro-Hungarian Bank , whose liquidation had been implemented in accordance with the Treaty of Saint-Germain-en-Laye signed on 10 September 1919, and whose Governing Council last met on 15 December 1922. Following the banking crisis of 1931 , Austrian National Bank President Viktor Kienböck oversaw an orthodox economic policy paradigm in which he rigorously defended
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#17327753791283172-444: The idea of withholding regional funding for those who break the deficit limits, as that would only impact the poorer states. In June 2010 France agreed to back Germany's plan for suspending the voting rights of members who breach the rules. In March 2011 was initiated a new reform of the Stability and Growth Pact aiming at straightening the rules by adopting an automatic procedure for imposing of penalties in case of breaches of either
3233-500: The island of Cyprus) belong to the United Kingdom, but there are agreements between the United Kingdom and Cyprus and between United Kingdom and EU about their partial integration with Cyprus and partial adoption of Cypriot law, including the usage of euro in Akrotiri and Dhekelia. Several currencies are pegged to the euro, some of them with a fluctuation band and others with an exact rate. The Bosnia and Herzegovina convertible mark
3294-497: The objectives. The Eurosystem is independent. When performing Eurosystem-related tasks, neither the ECB, nor an NCB, nor any member of their decision-making bodies may seek or take instructions from any external body. The Community institutions and bodies and the governments of the member states may not seek to influence the members of the decision-making bodies of the ECB or of the NCBs in the performance of their tasks. The Eurosystem
3355-470: The prudential supervision of credit institutions and the stability of the financial system . The ECB has an advisory role vis-à-vis the Community and national authorities on matters within its field of competence, particularly where Community or national legislation is concerned. The ECB, assisted by the NCBs, has the task of collecting the necessary statistical information either from the competent national authorities or directly from economic agents to enable
3416-502: The relevant Treaties, the current status being "the best way going forward to increase the resilience of euro area Member States to potential economic and financial crises. The European Central Bank , responding to a question by a Member of the European Parliament , has stated that an exit is not allowed under the Treaties. Likewise there is no provision for a state to be expelled from the euro. Some, however, including
3477-412: The world including eurozone as a single entity, by nominal GDP (2020) at their peak level of GDP in billions US$ . The values for EU members that are not also eurozone members are listed both separately and as part of the EU. HICP figures from the ECB, overall index: Interest rates for the eurozone, set by the ECB since 1999. Levels are in percentages per annum. Between June 2000 and October 2008,
3538-487: Was born with its first 11 member states on 1 January 1999. The first enlargement of the eurozone , to Greece, took place on 1 January 2001, one year before the euro physically entered into circulation. The next enlargements were to states which joined the EU in 2004 , and then joined the eurozone on 1 January of the year noted: Slovenia in 2007, Cyprus in 2008, Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014, and Lithuania in 2015. Croatia, which acceded to
3599-436: Was finally reached on a controversial proposal for member states to peer review each other's budgets prior to their presentation to national parliaments . Although showing the entire budget to each other was opposed by Germany, Sweden and the UK, each government would present to their peers and the Commission their estimates for growth, inflation, revenue and expenditure levels six months before they go to national parliaments. If
3660-654: Was once pegged to the Deutsche mark at par, and continues to be pegged to the euro today at the Deutsche mark's old rate (1.95583 per euro). The Bulgarian lev was initially pegged to the Deutsche Mark at a rate of BGL 1000 to DEM 1 in 1997, and has been pegged at a rate of BGN 1.95583 to EUR 1 since the introduction of the euro and the redenomination of the lev in 1999. The West African and Central African CFA francs are pegged exactly at 655.957 CFA to 1 EUR. In 1998, in anticipation of Economic and Monetary Union of
3721-679: Was re-established by the Central Bank Transition Act of 3 July 1945 of the Second Austrian Republic . The Austrian schilling came back to replace the Reichsmark on 21 December 1945. Much of the head office building served as headquarters of the American occupation forces in Austria from 1945 to 1951. The main tasks of the OeNB center on contributing to a stability-oriented monetary policy within
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