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Euro - Background
Euro map - who's in and who's out
Published: July 11 2001 17:17GMT | Last Updated: February 1 2002 19:10GMT

Click on the map above or scroll down to view country relations with EMU.






AustriaAUSTRIA

Austria's relationship with the EU was put under severe strain in 2000 when the far-right Freedom Party joined the coalition government, prompting some member states to impose sanctions on Austria.

A diplomatic tussle ensued in which the Austrian government threatened to hold a referendum on the sanctions if the EU states did not reverse their decision to suspend bilateral ties with Vienna.

It also threatened to block EU reforms, and delayed one EU decision - to nominate Germany's Horst Kohler as managing director of the International Monetary Fund - arguing that it had not been properly informed because of its diplomatic isolation. The sanctions were finally dropped in September.

Austria had voted by a two-thirds majority to join the European Union in 1994. However, populist support for both the EU and the single currency, has fluctuated. A year before the introduction of the single currency only 25 per cent of Austrians supported joining the euro. But by the time it was launched in January 1999, 66 per cent were in favour.

The issue on Austria's agenda now is enlargement. While the official line is support for expansion of the European Union, popular sentiment is more reticent about the EU's drift eastward and it is widely expected that Austria will be a tough negotiator when it comes to enlargement talks.



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BelgiumBELGIUM

As one of the EU's founding members and the self-styled "capital of Europe", there is great support for Emu in Belgium.

Belgians are used to the idea of monetary union, having shared a currency with Luxembourg since 1920. The euro's popularity is undisputed, with 70 per cent in favour of Emu, according to a survey in 1999.

Belgium became a founding member of the European Economic Community in 1957, and Brussels is home to many key European institutions, including the European Commission and the European Parliament.

The country took on the presidency of the EU in July 2001, and has outlined some ambitious plans for its presidency, identifying no fewer than 16 key areas of changes for the planned declaration on the future of Europe.

Even before it assumed the presidency, Belgium attracted controversy when Didier Reynders, the Belgian finance minister, suggested the EU be given powers to levy taxes to help meet its annual budget costs

However, Guy Verhofstadt, the Belgian prime minister, agrees with Luxembourg and the Netherlands that discussion of the EU's powers should not weaken such key policy areas as the single market or the euro.



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DenmarkDENMARK

Denmark voted against the Maastricht Treaty in 1992 but passed the following year after several opt-outs were negotiated, which included staying out of euro.

In a referendum in September 2000, the Danish population rejected the single currency.

The "yes" campaign was attacked for focusing too heavily on the economic arguments and ignoring the the political and democratic implications of further European integration. The economic aspects were deemed less significant as the Danish krone was already fixed to the euro through Denmark's membership of the second phase of the ERM in 1999 which kept the value of the krone within a band ranging up to 2.5 per cent higher or lower than the euro.

Six months before the 2000 referendum, polls had predicted that the euro was supported by 60 per cent of the population, but that support had collapsed to 47 per cent by the time of the vote.

Danish referendum special report



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FinlandFINLAND

One of the euro's most ardent supporters, Finland shrugged aside the reluctance of its Nordic neighbours Denmark and Sweden and signed up for the euro in 1998, three years after it joined the EU.

Finland's euro-credentials were displayed in full when it held the EU presidency in 1999. During its tenure, Finland secured the widening of the enlargement negotiations from six to 12 mainly east European countries and granted candidate status to Turkey. It also presided over the decision to create by 2003 a 50,000 to 60,000-strong EU-led military capability.

Finland's economy has performed well since the country joined the EU. It has received financial help for its poorer, sparsely-populated regions in the north and east of the country. And the euro provided it with some much needed insulation from the Russian financial crisis of 1998.



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FranceFRANCE

France is preparing for the introduction of the euro notes and coins with mixed feelings as its desire to lead European integration clashes with firmly-entrenched national traditions.

In some ways, the switch to the new currency will therefore provide a tough test for French "exceptionalism," the notion that the French are somehow unique and need to preserve their identity from outside pressure.

In the years following the second world war, France was at the heart of the intellectual push for a unified Europe, thanks to people such as Jean Monnet and Robert Schumann, who are considered the architects of the European project. In the 1980s, under President François Mitterrand, France further strengthened its place at the forefront of the European Union, leading the debate in Brussels and benefiting from Jacques Delors' influential years at the helm of the European Commission.

In spite of the euro's weakness when Greece entered the euro-zone on January 1 2001, opinion polls showed that some 70 per cent of Greeks were in favour of membership.

There is little attachment to the drachma. Europe's second-oldest currency is linked in Greek minds with economic and political backwardness. Greece is leveraging the euro to encourage foreign direct investment with a view to the country becoming a business and transport hub, linking south-east Europe with EU markets.

Membership for Greece, which up until the late 1990s was often still categorised as an “emerging market” also acts as a beacon for central and eastern European countries, which hope they will not have to wait long after joining the EU before they, too, can abandon their national currencies. Greece had been pushing for enlargement. However, it stands to receive less EU aid -which makes up about 3 per cent of GDP - as other poorer countries join.

Since joining the euro-zone Greece's economy has grown strongly. But membership of the euro has increased the pressure on the Socialist government to push through long-awaited structural reforms, such as pension reforms.



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IrelandIRELAND

During the 1990s a rapid increase in foreign direct investment and generous amounts of EU regional aid helped transform Ireland into the EU's fastest growing economy.

The Irish have traditionally been one of the most pro-European nations, unsurprising considering the large amounts of financial assistance they have received from Brussels.

But more recently, the mutual affection between Ireland - nicknamed the "Celtic tiger" - and the EU has dwindled.

The first clash came over Ireland's 2001 budget, when EU finance ministers told the government to adjust the budget, which proposed tax cuts and raising public spending sharply, on grounds it would aggravate economic overheating and contravene guidelines accepted by member states.

Ireland and the EU were soon at odds again when the Irish public rejected the Nice Treaty, drawn up to prepare for the enlargement of the European Union, in a referendum.

The "no" vote came as a shock to Ireland's politicians, who now have until December 2002 to secure Irish popular support for Nice. The "no" camp was was made up of Greens, nationalists, anti-abortion campaigners and socialists.



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ItalyITALY

Italy has attracted a great deal of criticism from its European partners over its public spending and its large debt.

On entering the eurozone the Italian economy was the most stretched of all countries by the EU's convergence criteria for membership. By pushing through several reforms, most notably overhauling public finances, the then centre-left government was able to join the euro. However other EU members feel that Italy still has some way to go to meet its' obligations.

Public spending quickly rose above the original deficit target for eurozone countries of 0.8 per cent of GDP and the country hovers near the 3 per cent deficit limit of the stability pact. Furthermore there is concern Italy may try to renegotiate its promise to the EU to reduce national debt to 100 per cent of gross domestic product by 2003.

However, there is growing confidence that the Silvio Berlusconi government will continue with the necessary reforms. Mr Berlusconi, unveiled its five-year economic programme in July 2001 aimed at "stirring up the economy". After its release Antonio Fazio, the governor of the Bank of Italy, said Italy could achieve a 3 per cent growth rate in 2002 and a balanced budget by 2003. This was taken as a positive sign, but a necessary measure if Italy wants to keep its European partners happy.



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LuxembourgLUXEMBOURG

The smallest member of the EU was one of the EEC's six founding nations in 1957. Luxembourg has provided two of the Europe var html = getAdHTML('fmbut2',88,31);document.write(html);