What Is the Euro Market?

The Euro, which is the currency of the European Central Bank, drives trading on the Euro market.

As of December 2010, the Euro market was comprised of 27 European Union (EU) member countries. The majority of countries within the EU have adopted the Euro as their single currency and monetary system, which fuels the trading of currency, bonds and credit on the Euro market.

History

In 1992, the EU was established with the passage of the Maastricht Treaty. Subsequently, the Euro was launched in 1999 with 11 European countries: the Netherlands, Germany, France, Luxembourg, Italy, Ireland, Belgium, Austria, Portugal, Spain and Finland.

Function

The euromarket provides financing for international trade through the European Central Bank (ECB). Although some European countries do not use the Euro, fixed import duties and the removal of tariffs allow for more efficient trading through one common Euro market.

Benefits

The Euro market allows the elimination of currency exchange fees between European countries. Additionally, corporations are able to easily compare competitive pricing across European countries, which encourages competition and lowers the price of consumer products on the Euro market.

References

• Investopedia: Euromarket
• The University of Iowa: What is the European Monetary Union?