Euro Zone Union Adopt Euros As Common Currency

Twenty seven countries of Europe after long deliberations have formed the Euro Zone

. The idea of creating Euro Zone is to put the resources of all the countries together for common good. It is almost like a federation. By agreeing to have euros as common currency the countries of the region cemented the unifying factor very well. With every country having its own currency it posed lot of problems in the matter of trade and commerce. The exchange rate of every countrys currency used to be determined by prevailing economic condition in that particular country. As a result, many countries had great trade imbalances, seriously affecting their economic progress.

In the international trade exchange rate of the currency of the trading partners plays a very important part. In the Euro Zone, different economic policies have been practiced by different countries. Some of them might have been flawed. The administration in some countries might have also been not up to the desired level of efficiency. The value of the currency of any country in the international market has great significance in its standing. By adopting a common currency like the Euro many other countries have benefited. They are no longer weighed down by the fluctuating value of their currency.

The Euro is the most sought after currency in the world of international trade next only to the US Dollar. It has been able to maintain a very stable exchange rate with respect to the US Dollar. Unfortunately, weaknesses in the running of the finances of one or two countries like Spain and Greece have led to corrosion in the value of the Euro as against the US Dollar. However, it is still able to maintain a rate of one Euro being equivalent to 1.24 US $ approximately. This is the lowest rate that has been experienced and it is hoped that with revival packages in the affected countries the rate will only go up.

Many countries that used to have US Dollars as their trading currency have switched over to euros. This has been done to suit their convenience. The trend is very common among African countries many of whom have rich sources for oil and scarce and strategic metals like Uranium. As of now, it has been estimated that 330million Europeans have been using the Euro for their regular activities on a daily basis. It is also a sizable 180miilion in other countries in the world. Of this, African countries account for major share of 150 million.

The euros are administered by the European Central Bank that has its headquarters in Frankfurt Germany. This central bank has the responsibility of coordinating the administration of the currencies of the participating countries. The Euro comes in several denominations starting from one Euro to 500 Euros. Coins have also been minted and put into circulation. Every country of the Euro Zone that has adopted the Euro has its own image stamped at the back of the coin. The Euro has been certified as a very strong currency in international trade.

by: Sharon Evans

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