What is the difference between the “European Union” and the “Euro Zone”? In your response, be...

What is the difference between the “European Union” and the “Euro Zone”? In your response, be sure to explain the origins/histories and current challenges facing these two groups of countries.

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Expert Solution

The European Union (EU) is a political and economic union of 28 states that are located within Europe. The Euro Zone is a monetary union of 19 states of the European Union which have adopted the euro (€) as their common currency.

The EU was created in the aftermath of the Second World War to foster economic cooperation and minimise economic conflict. The main objective of forming EU was to make countries economically interdependent in trade and minimise the conflict between or among them.

The currency euro came into existence on 1 January 1999 in Europe. Due to forced negotiation from the United Kingdom to create an economic and monetary union by 1999 for all EU states except the UK and Denmark, euro zone came into existence in 1999 and came into full force in 2002.

EU is facing changes in implementing proper and universal policies on trade and culture of the states. It also face challenges in enacting judicial legislation in the areas of home affairs.

Currently euro zone is facing property crisis. Internal factors like the structure of the debt, the quality of the financing and the economic policy diverge considerably from country to country. Due to these differences, EU policy response is going beyond liquidity facilities and financial support remains outstanding.

Rahul Sunny answered 1 year ago

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