The euro brings tangible benefits to the lives of Europeans. As the central bank for the euro area, the ECB watches over a currency that connects more than 340 million people speaking more than 24 languages.
As a currency union of 19 member countries, the euro area is a unique construct. But how does the euro area compare internationally? How does it perform economically? And what does that mean for Europeans?
How many people live in the euro area?
With more than 340 million inhabitants, the euro area is home to some 5% of the world’s population. That’s a higher number than live in the United States.
It also means the euro area is one of the largest economies in the world. Seven new member countries have joined the euro area since its establishment, and more are expected to follow.
How does the euro area perform economically?
The population of the euro area is highly productive. As in other highly developed economies, the services sector has the largest share of total output, followed by the industrial sector and a relatively small agricultural sector.
Major world economies by GDP per capita
Sources: Eurostat, World Bank and ECB calculations. Note: 2016; data for US, Japan and China are converted into OECD purchasing power parities (PPPs).
Its strong economic output makes the euro area one of the largest economies in the world. In terms of gross domestic product (GDP) per capita, the euro area ranks second among the world’s leading economies, which reflects the high standard of living its citizens enjoy.
What about international trade?
As a highly industrialised economy, the euro area exports a significant share of the goods and services it produces to the world markets. Many of the euro area’s manufactured goods, such as machinery, pharmaceuticals, cars and aeroplanes, are internationally renowned.
Exports of goods and services as a percentage of GDP
Sources: ECB data, OECD, IMF. Euro area: based on extra-euro area transactions.
The euro area has maintained and even enhanced its leading position in international trade since its establishment in 1999. Its main trading partners are the United States, the United Kingdom and China, while trade with emerging markets continues to rise.
The euro area is an open economy when compared with other major economies. Its trade openness has noticeably increased since 2004, primarily as a result of growing trade with new EU Member States and China. The euro area is at the heart of many international production chains.
High exports have a positive effect on employment, economic growth and investment in the euro area, which in turn supports the overall prosperity of its citizens.
How is the euro seen?
The euro has enjoyed a high level of trust both at home and abroad. Three out of four people in the euro area support the euro, according to the Eurobarometer survey, a twice-yearly opinion poll by the European Commission. This is the highest level of public support since 2004.
Internationally, the euro ranks second both in terms of most traded currencies and in terms of most important reserve currencies. This reflects the high level of trust that investors worldwide have in the stability and strength of the euro area economy.
The euro area continues to be a leading force in the global economy. This benefits its citizens and gives the euro area a more powerful voice in the global economy.
And of course euro area citizens can travel across borders inside the currency area without exchanging money. They can also compare prices across the whole euro area to find the cheapest goods.
Source: European Central Bank
Published: 25 August 2017
Updated: 13 December 2019
The above presentation was created for educational purposes.