EMU, the European Monetary Union, is an alliance of the 20 European states that belong to the European Union and have introduced a common currency, the euro. In the proper sense, the union refers to itself as the "European Economic and Monetary Union," or EEMU.
The euro countries cover an area of 2.82 million km² in Europe and have a population of around 346.97 million. In terms of area, this corresponds to about 1.9 percent of the world's land mass and 4.4 percent of the world's population. With a money supply of around 12 trillion euros, the currency is one of the few leading currencies in the world. Only the Chinese yuan and the US dollar have a higher money supply.
All 20 EMU countries have adopted the euro as their currency. Outside the EU, other countries have the euro as their official currency. In Europem these are Andorra, Kosovo, Monaco, Montenegro, San Marino and Vatican City. In addition, some dependent territories of EU states have adopted the euro, but some are neither EU nor EMU members. These are, for example, the Dutch and French overseas territories in the Caribbean, the Indian Ocean and the Pacific.
Common economic objectives
The common goal of the union is the further development and stabilisation of the European internal market. One of the union's primary objectives is to maintain the price level and currency stability of the euro. All states of the European Union participate in the economic union, but not in the monetary union. In other words, Bulgaria, Denmark, Croatia, Poland, Romania, Sweden, the Czech Republic and Hungary also participate. These countries are exempted from EMU, but do not yet have to complete the third stage of the introduction of the euro.
The basic prerequisite for admission to EMU is membership in the European Union. Even financially strong and stable countries outside the EU cannot become Alliance members. In addition, strict conditions are imposed on the economy of a candidate country. For example, the inflation rate must not be lower than 1.5 percent of the most price stable EMU country. The country must not have more than 60 percent debt and new debt must be below 3 percent. It should be noted that these are admission criteria. If a member state no longer meets these criteria after admission, it does not automatically drop out. The question as to whether, for example, Greece could be excluded from EMU by force because it no longer fulfilled the admission criteria has so far remained unanswered.
Some of the above-mentioned member states have other external territories dependent on them. These are not independent states, but they do have some economic and political autonomy. The EMU treaties apply to them at least in part. These countries are not listed as official member states.