The Euro zone has been in operation since January 1, 1999. It comprises twelve EU countries which are full members of the Economic and Monetary Union. These countries have given up, in favour of the European Central Bank, their sovereign rights to conduct the monetary policy. This policy is now uniform for all the member countries.In contrast, budget policy has remained in the hands of the national governments, and remains decentralised. This involves many potential threats to a smooth functioning of the common currency area. In order to minimise these, the Maastricht Treaty includes provisions aimed at preventing excessive deficits in the budgets of the member countries. It also provides for a procedure to apply to the countries which allow a serious deficit to arise. The so-called Growth and Stability Pact lays down a set of sanctions which may be used if a country refuses to reduce its budget deficit.