How can the EU pay states like the Czech Republic when Czechia doenst use euro?

101 views
0

How can the EU pay states like the Czech Republic when Czechia doenst use euro?

In: 0

The question could also be posed as “How do countries with different currency, trade with currency?”

And the answer is that generally, the governments of countries dont trade with each other too much, a majority of trade is between regular people and businesses, each having different methods to agree upon a successful trade.

For people like me or you, we can buy the currency we wish to trade in, for an equivalent amount. We call this a currency exchange.

For businesses, there is a lot more negotiation possible, from physical goods, contracts, services, stocks, or even the method I previously mentioned.

Governments, when they do trade, varies. It could be a currency, it could be some other form of asset, all is negotiable. Governments make their own rules for this, normal currency rules do not apply.

It depends, but “with Euros” is a likely option. Countries love having Euros, US Dollars and similar stable currencies. You know you can buy things with them in the future.

Countries will less stable currencies have a harder time paying with their own currency.

https://en.wikipedia.org/wiki/Reserve_currency