European Union vs Eurozone

What is the difference between the European Union and the Eurozone?

1 Jun 2017 07:05 PM

Some people think that the EU and the Eurozone are one entity and that these two terms are interchangeable. Recent political and economic developments have once again brought these two terms to the spotlight, and it is important to understand the distinction. In this article, we will try to explain the difference between the EU & the Eurozone.

European Union

The EU is a political and economic union consisting of 28 countries that together cover much of the continent. The EU was created in the aftermath of the Second World War, with the initial goal being to foster economic cooperation. The idea was that countries that trade with one another become economically interdependent and are thus less likely to engage in conflict.

At its inception in 1958, it was initially a union of only 6 countries: Belgium, Italy, Germany, France, Luxemburg, and the Netherlands. Since then, a huge single market has been created and continues to develop until now.

What began as a purely economic union has evolved into an organization covering policy areas such as climate, environment, foreign relations, security, migration, and more.

This union has also been governed with the principle of representative democracy, where citizens are directly represented at union level in the European Parliament and member states are represented in the European Council.

Member States:

Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Poland, Spain, Sweden, United Kingdom (currently leaving the EU).

Eurozone

The Eurozone is a geographical and economic zone consisting of EU member states which have adopted the Euro as their common currency. The Eurozone is the concrete evidence of European integration, and 19 countries out of 28 EU members adopted the Euro as their common currency and about 338.6 million people use it.

This economic union involves the coordination of economic & financial policies as well as a common monetary policy. The Euro was launched in January 1999 as the Eurozone’s virtual currency and the European Central Bank began printing money in January 2002.

Eurozone states: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain

States outside the Eurozone: Bulgaria, Croatia, Czech, Hungary, Poland, Romania, Sweden.

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