What is the Eurozone?
Simply put, the Eurozone is a union of 19 of the 28 European countries or member states, that have adapted the euro as their common currency. The remaining countries use their own currencies as their sole forms of legal tender. Monetary policy within the Eurozone is set by The European Central Bank, also known as the ECB. The ECB is governed by a president and a board, which consist of the heads of national central banks, who manage a state’s currency, money supply and interest rates. The primary function of the ECB is to keep inflation under control. Though the Eurozone has been experiencing some financial setbacks lately, things appear to be stabilizing.
Current conditions within the Eurozone
Currency within the zone is one of the most liquid when compared to other currencies around the world, which makes the currency more attractive to central banks, where the euro continues to gain support in reserves. There is a lot of good news for the future of the Eurozone. Inflation rose 0.0% in October, 2015. Also, lower energy cost has kept the cost of living down, and the unemployment crisis has somewhat eased. For the year to the month of October, inflation rose only 0.0 percent, which is good but still doesn’t put inflation where the ECB wants it. Unemployment reached a new 6-year low, according to Eurostat, which reports a jobless rate of 10.8 percent, which is lower than economist had predicted and is the lowest since January, 2012.
What does the future hold for the Eurozone?
Slow but continuous growth will more than likely continue within the zone. Spain, one of the big four countries of the Eurozone, is showing the highest economic growth at 0.7 percent, while Germany came in second with 0.4 percent and Italy at 0.3 percent. While economic growth within the zone is moving forward, it is doing so at a pace much slower than that of the U.S. economy experienced over the past several years. The stimulus package may provide a much needed boost to thrust economic growth within the Eurozone to a faster pace. Otherwise, growth will most likely remain at its current levels.