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Explore the key issues surrounding the Euro Area, including which countries adopted the Euro, the importance of convergence criteria, and the effects of a single currency. This overview addresses the motivations for Euro adoption, the debate on UK's entry, and the concept of optimal currency areas. Analyzing recent macroeconomic performance reveals significant disparities within the Euro Zone, especially in light of the 2008 recession, rising tensions from divergent economic outcomes, and the ongoing challenges of inflation and unemployment.
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Euro Area in Charts tutor2u™
Key Issues • Which countries have joined the Euro Zone? • Why have convergence criteria? • What are the basic effects of a single currency? • What are the motivations for joining the Euro? • The case for UK entry • The case against UK entry • Optimal currency areas • Recent macroeconomic performance of the Euro Zone area • Tensions for the single currency in 2009-2010
Euro Area macroeconomics • Steady growth since 1996 came to an end in 2008 when the Euro Area moved into recession • There have been sizeable differences in macroeconomic outcomes within the Euro Area • Almost inevitable given the structural differences in the sixteen economies that now have the Euro • Tensions are rising as growth falters, unemployment rises and individual countries struggle to come to terms with the global credit crunch