countries have increased their border controls. The EU has long upheld the freedom to travel

between member countries. But these border restrictions are said to potentially threaten

the EU economy and specifically, the Euro. But could something like stronger borders

really affect the Union’s currency? Just how powerful is the Euro?

Well, the Euro is used as a primary currency by 19 out of 28 countries within the European

Union. Historically, European countries used their own private currencies, like the lira,

the marc, or the franc. But with the establishment of the European Union, it made sense to use

a common currency. Europeans would no longer need to exchange money between countries,

prices would be relatively transparent, and the economy would work more efficiently throughout

the region. Countries whose currencies were already stable were given the opportunity

to replace them with a unified currency called the Euro. This transition occurred on January

1st 1999.

However, in the years since, 9 non-Eurozone countries have maintained their pre-European

Union currencies. For many this is due to the loss of control over interest rates or

currency policy. For others it is over fears of instability. However, with the exception

of the UK and Denmark, all EU countries are expected to eventually join the Euro once

their economies are good enough. Additionally, there are several countries and regions not

in the EU which also primarily use the Euro.

This is not all that surprising, as the Euro is used by more than 338 million people every

day, and is the second most used currency in the world. Since it’s physical introduction,

the Euro has been fairly competitive with the dollar, reaching a high of 1 dollar and

60 cents per Euro during the financial crisis in 2008. But in recent years, the Eurozone

has been dealing with their own crisis, and today the two currencies are almost equal.

The problem has been that more EU members have been unable to pay their debts, and Iceland

even saw a total collapse of their banking system. This has made investors reticent to

rely on the currency, which is coupled with Greece, Italy, Portugal and others threatening

to tank the Euro’s value. Meanwhile, the US dollar has seen a slow but steady rise

as America’s economy recovers from the banking crisis.

Overall, the Euro is relatively new, somewhat unstable, and prone to influence from weaker

EU members. Still, it is an extremely popular currency, and has become the European standard.

The Euro is expected to continue its powerful role in the world economy, but as the Eurozone

crisis continues, nobody really knows what the future holds.

Many people have their doubts about the creation of the Eurozone. Learn more about the downsides

in our video at the top. Learn more about the instability of the European Union at large

in the video at the bottom. Thanks for watching! Don’t forget to subscribe for more videos

from TestTube News.