The Single Currency – the Euro €

An introduction

Before the EuroBefore the Euro

each country in the EU had it’s own currency.

Germany - the Deutschmark

France – the Franc Italy – The Lira Spain – the Peseta Ireland – the Punt

So to spend money in any of these countries you had to change your own currency into the other countries currency.

So French Person visiting Germany -Francs to Deutschmarks

or Irish family holidaying in Spain - Punts to Pesetas

and this cost money

2002 – the Euro €In 2002 after a great

deal of economic preparation 11 countries did away with their own currencies and instead started to use the Euro.

So Germans found that instead of having DMs they now had €s. For every 1.95 DMs they now had 1€.

The Irish, no more Punts, instead €s. For every Punt they swopped they gained 1.25€

Effects of the Single CurrencyTrade was easierNo more currency

exchange between the 11 countries, so saving money

Lower interest rates for many countries.

No varying values of currency, making the costs of importing and exporting more predictable

Original Members of the €

Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain

Other countries have since joined;

Cyprus, Greece, Malta, Slovakia, Slovenia, Estonia

Why did Britain say no to joiningBritain could have

joined the Euro, but instead stayed out and we kept the £. Why?

We did not want to lose control over setting our own interest rates

We had very different economies from Germany and France

British people did not want to lose the £

Euro Notes and coins