Euro zone gains another member as Slovenia adopts the euro
January 1st saw the euro zone welcome a new member as Slovenia gave up its national currency, the tolar, to adopt the euro. Slovenia is the first of the ten countries that joined the EU in 2004 to meet the economic requirements for entering the euro club.
The next EU members to switch to the single currency – in 2008 - will be Malta and Cyprus, two countries already familiar with the euro through their sizeable tourism sectors. As for the 12 countries that first adopted the single currency five years ago, they are already used to its practical advantages.
Ease of use when travelling between euro zone countries and price transparency are the most tangible benefits of the common currency. Having a single currency also helps foster a sense of commonality among Europeans. Economically, it improves the efficiency of the EU’s single market, making it more stable and attractive for foreign investors. And the euro has also proven a better shelter from external economic shocks than the national currencies it replaced, providing a certain degree of protection, for example, during the latest oil crisis.
The Commission’s analysis of the euro zone's progress in 2006 is upbeat. However it points out the need for euro zone members to continue consolidating their budgets, encouraging further competition and reforming their labour markets.
Video - the euro
Video - Slovenia joins the euro