Eurozone: Composition, Institutions and Maastricht Entry Criteria

Why in News ?

• Eurozone inflation recently rose to 3.2% due to energy and services price pressures. 

Composition and Membership

• The Eurozone comprises 21 European Union countries using the Euro (€) as their currency. 
• Bulgaria became the latest member in 2026. 
• Countries such as Denmark, Sweden, Poland, Hungary, Romania and Czech Republic have not adopted the euro. 

Institutional Framework

• The European Central Bank formulates monetary policy for the Eurozone. 
• The ECB controls euro currency issuance and interest-rate decisions. 
• The institution is led by a President and the governors of participating central banks. 

Economic Stabilisation Mechanism

• The European Stability Mechanism provides financial assistance during economic crises. 
• Support is provided through conditional rescue loans. 

Maastricht Criteria

• Entry into the Eurozone requires compliance with price stability, sound public finances, exchange-rate stability and durable convergence. 
• These criteria were established under the Maastricht Treaty (1992).