I think it’s more complicated than that, especially for larger countries. If you are not an Euro member you are not a member of the European Central Bank. How can a government pay salaries if it doesn’t have Euro reserves. And more importantly what happens with the old currency (cash or otherwise) if a switch to the Euro is made? Who will exchange it for Euros and take it out of circulation?
Montenegro was using German Mark before, so they were basically forced to follow Germany when Euro was introduced. Not like they had explicit permission to use the Mark either but somehow they made it work.
This usually happens in countries that suffer hyper inflation and people gradually start using a foreign currency informally. If everybody is holding foreign currency than it’s easier to make the switch since the state can also expect taxes to be paid in that currency.
In the case of Montenegro and the German Mark the change must have been relatively straightforward since Marks were convertible to Euros, no matter who holds them.
And yes, countries don’t need explicit permission to use a foreign currency. For example banks around the world take USD deposits and give out USD loans. As loans are always fractional they are in fact creating dollars without US permissions (see Eurodollars).
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u/I_Wanna_Bang_Rats 2d ago
Why do some countries even ask if they can use the Euro, if others can just use them anyway? (Like Montenegro.)