the euro main file

7/28/2019 The Euro Main File

1/28

1

THE EURO

The euro(sign:;code:EUR) is the currency used by theInstitutions of the European Unionand is

the official currency of theeurozone, which consists of 17 of the 27member states of the EuropeanUnion:Austria,Belgium,Cyprus,Estonia,Finland,France,Germany,Greece,Ireland,Italy,Luxembo

urg,Malta, theNetherlands,Portugal,Slovakia,Slovenia, andSpain. The currency is also used in a

furtherfive European countriesand consequently used daily by some

332 millionEuropeansAdditionally, more than 175 million people worldwideincluding 150 million

people in Africause currenciespeggedto the euro.

The euro is the second largestreserve currencyas well as the second most traded currency in the

world after theUnited States dollar.As of September 2012, with more than 915 billion in circulation,

the euro has the highest combined value of banknotes and coins incirculationin the world, having

surpassed the US dollar, Based onInternational Monetary Fundestimates of 2008 GDP

andpurchasing power parityamong the various currencies, the eurozone is the second largest

economy in the world.

The name euro was officially adopted on 16 December 1995. The euro was introduced to world

financial markets as an accounting currency on 1 January 1999, replacing the formerEuropean

Currency Unit(ECU) at a ratio of 1:1 (US$1.1743). Eurocoinsandbanknotesentered circulation on

1 January 2002. While the euro dropped subsequently to US$0.8252 within two years (26 October

2000), it has traded above the US dollar since the end of 2002, peaking at US$1.6038 on 18 July

2008. Since late 2009, the euro has been immersed in theEuropean sovereign-debt crisiswhich has

led to the creation of theEuropean Financial Stability Facilityas well asother reformsaimed at

stabilising the currency. In July 2012, the euro fell below US$1.21 for the first time in two years,

following concerns raised over Greek debt and Spain's troubled banking sector.
http://en.wikipedia.org/wiki/Currency_signhttp://en.wikipedia.org/wiki/Currency_signhttp://en.wikipedia.org/wiki/Currency_signhttp://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/Institutions_of_the_European_Unionhttp://en.wikipedia.org/wiki/Institutions_of_the_European_Unionhttp://en.wikipedia.org/wiki/Institutions_of_the_European_Unionhttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Member_state_of_the_European_Unionhttp://en.wikipedia.org/wiki/Member_state_of_the_European_Unionhttp://en.wikipedia.org/wiki/Member_state_of_the_European_Unionhttp://en.wikipedia.org/wiki/Member_state_of_the_European_Unionhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/Europeanshttp://en.wikipedia.org/wiki/Europeanshttp://en.wikipedia.org/wiki/Europeanshttp://en.wikipedia.org/wiki/Fixed_exchange_ratehttp://en.wikipedia.org/wiki/Fixed_exchange_ratehttp://en.wikipedia.org/wiki/Fixed_exchange_ratehttp://en.wikipedia.org/wiki/Reserve_currencyhttp://en.wikipedia.org/wiki/Reserve_currencyhttp://en.wikipedia.org/wiki/Reserve_currencyhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Circulation_(currency)http://en.wikipedia.org/wiki/Circulation_(currency)http://en.wikipedia.org/wiki/Circulation_(currency)http://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/Coinhttp://en.wikipedia.org/wiki/Coinhttp://en.wikipedia.org/wiki/Coinhttp://en.wikipedia.org/wiki/Banknotehttp://en.wikipedia.org/wiki/Banknotehttp://en.wikipedia.org/wiki/Banknotehttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/History_of_the_euro#Reformhttp://en.wikipedia.org/wiki/History_of_the_euro#Reformhttp://en.wikipedia.org/wiki/History_of_the_euro#Reformhttp://en.wikipedia.org/wiki/History_of_the_euro#Reformhttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/Banknotehttp://en.wikipedia.org/wiki/Coinhttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/Circulation_(currency)http://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Reserve_currencyhttp://en.wikipedia.org/wiki/Fixed_exchange_ratehttp://en.wikipedia.org/wiki/Europeanshttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Member_state_of_the_European_Unionhttp://en.wikipedia.org/wiki/Member_state_of_the_European_Unionhttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Institutions_of_the_European_Unionhttp://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/Currency_sign


2/28

2

Contents

[hide]

1 Administration

2 Issuing modalities for banknotes

3 Characteristics

o 3.1 Coins and banknotes

o 3.2 Payments clearing, electronic funds transfer

o 3.3 Currency sign

4 History

o 4.1 Introduction

o 4.2 Sovereign debt crisis

5 Direct and indirect usage

o 5.1 Direct usage

o 5.2 Use as reserve currency

o

5.3 Currencies pegged to the euro6 Economics

o 6.1 Optimal currency area

o 6.2 Transaction costs and risks

o 6.3 Price parity

o 6.4 Macroeconomic stability

6.4.1 Trade

6.4.2 Investment

6.4.3 Inflation

6.4.4 Exchange rate risk

6.4.5 Financial integration

6.4.6 Effect on interest rates 6.4.7 Price convergence

6.4.8 Tourism

7 Exchange rates

o 7.1 Flexible exchange rates

o 7.2 Against other major currencies

8 Linguistic issues

9 See also

10 Notes

11 References

12 Further reading

13 External links
http://en.wikipedia.org/wiki/Eurohttp://en.wikipedia.org/wiki/Eurohttp://en.wikipedia.org/wiki/Eurohttp://en.wikipedia.org/wiki/Euro#Administrationhttp://en.wikipedia.org/wiki/Euro#Administrationhttp://en.wikipedia.org/wiki/Euro#Issuing_modalities_for_banknoteshttp://en.wikipedia.org/wiki/Euro#Issuing_modalities_for_banknoteshttp://en.wikipedia.org/wiki/Euro#Characteristicshttp://en.wikipedia.org/wiki/Euro#Characteristicshttp://en.wikipedia.org/wiki/Euro#Coins_and_banknoteshttp://en.wikipedia.org/wiki/Euro#Coins_and_banknoteshttp://en.wikipedia.org/wiki/Euro#Payments_clearing.2C_electronic_funds_transferhttp://en.wikipedia.org/wiki/Euro#Payments_clearing.2C_electronic_funds_transferhttp://en.wikipedia.org/wiki/Euro#Currency_signhttp://en.wikipedia.org/wiki/Euro#Currency_signhttp://en.wikipedia.org/wiki/Euro#Historyhttp://en.wikipedia.org/wiki/Euro#Historyhttp://en.wikipedia.org/wiki/Euro#Introductionhttp://en.wikipedia.org/wiki/Euro#Introductionhttp://en.wikipedia.org/wiki/Euro#Sovereign_debt_crisishttp://en.wikipedia.org/wiki/Euro#Sovereign_debt_crisishttp://en.wikipedia.org/wiki/Euro#Direct_and_indirect_usagehttp://en.wikipedia.org/wiki/Euro#Direct_and_indirect_usagehttp://en.wikipedia.org/wiki/Euro#Direct_usagehttp://en.wikipedia.org/wiki/Euro#Direct_usagehttp://en.wikipedia.org/wiki/Euro#Use_as_reserve_currencyhttp://en.wikipedia.org/wiki/Euro#Use_as_reserve_currencyhttp://en.wikipedia.org/wiki/Euro#Currencies_pegged_to_the_eurohttp://en.wikipedia.org/wiki/Euro#Currencies_pegged_to_the_eurohttp://en.wikipedia.org/wiki/Euro#Economicshttp://en.wikipedia.org/wiki/Euro#Economicshttp://en.wikipedia.org/wiki/Euro#Optimal_currency_areahttp://en.wikipedia.org/wiki/Euro#Optimal_currency_areahttp://en.wikipedia.org/wiki/Euro#Transaction_costs_and_riskshttp://en.wikipedia.org/wiki/Euro#Transaction_costs_and_riskshttp://en.wikipedia.org/wiki/Euro#Price_parityhttp://en.wikipedia.org/wiki/Euro#Price_parityhttp://en.wikipedia.org/wiki/Euro#Macroeconomic_stabilityhttp://en.wikipedia.org/wiki/Euro#Macroeconomic_stabilityhttp://en.wikipedia.org/wiki/Euro#Tradehttp://en.wikipedia.org/wiki/Euro#Tradehttp://en.wikipedia.org/wiki/Euro#Investmenthttp://en.wikipedia.org/wiki/Euro#Investmenthttp://en.wikipedia.org/wiki/Euro#Inflationhttp://en.wikipedia.org/wiki/Euro#Inflationhttp://en.wikipedia.org/wiki/Euro#Exchange_rate_riskhttp://en.wikipedia.org/wiki/Euro#Exchange_rate_riskhttp://en.wikipedia.org/wiki/Euro#Financial_integrationhttp://en.wikipedia.org/wiki/Euro#Financial_integrationhttp://en.wikipedia.org/wiki/Euro#Effect_on_interest_rateshttp://en.wikipedia.org/wiki/Euro#Effect_on_interest_rateshttp://en.wikipedia.org/wiki/Euro#Price_convergencehttp://en.wikipedia.org/wiki/Euro#Price_convergencehttp://en.wikipedia.org/wiki/Euro#Tourismhttp://en.wikipedia.org/wiki/Euro#Tourismhttp://en.wikipedia.org/wiki/Euro#Exchange_rateshttp://en.wikipedia.org/wiki/Euro#Exchange_rateshttp://en.wikipedia.org/wiki/Euro#Flexible_exchange_rateshttp://en.wikipedia.org/wiki/Euro#Flexible_exchange_rateshttp://en.wikipedia.org/wiki/Euro#Against_other_major_currencieshttp://en.wikipedia.org/wiki/Euro#Against_other_major_currencieshttp://en.wikipedia.org/wiki/Euro#Linguistic_issueshttp://en.wikipedia.org/wiki/Euro#Linguistic_issueshttp://en.wikipedia.org/wiki/Euro#See_alsohttp://en.wikipedia.org/wiki/Euro#See_alsohttp://en.wikipedia.org/wiki/Euro#Noteshttp://en.wikipedia.org/wiki/Euro#Noteshttp://en.wikipedia.org/wiki/Euro#Referenceshttp://en.wikipedia.org/wiki/Euro#Referenceshttp://en.wikipedia.org/wiki/Euro#Further_readinghttp://en.wikipedia.org/wiki/Euro#Further_readinghttp://en.wikipedia.org/wiki/Euro#External_linkshttp://en.wikipedia.org/wiki/Euro#External_linkshttp://en.wikipedia.org/wiki/Euro#External_linkshttp://en.wikipedia.org/wiki/Euro#Further_readinghttp://en.wikipedia.org/wiki/Euro#Referenceshttp://en.wikipedia.org/wiki/Euro#Noteshttp://en.wikipedia.org/wiki/Euro#See_alsohttp://en.wikipedia.org/wiki/Euro#Linguistic_issueshttp://en.wikipedia.org/wiki/Euro#Against_other_major_currencieshttp://en.wikipedia.org/wiki/Euro#Flexible_exchange_rateshttp://en.wikipedia.org/wiki/Euro#Exchange_rateshttp://en.wikipedia.org/wiki/Euro#Tourismhttp://en.wikipedia.org/wiki/Euro#Price_convergencehttp://en.wikipedia.org/wiki/Euro#Effect_on_interest_rateshttp://en.wikipedia.org/wiki/Euro#Financial_integrationhttp://en.wikipedia.org/wiki/Euro#Exchange_rate_riskhttp://en.wikipedia.org/wiki/Euro#Inflationhttp://en.wikipedia.org/wiki/Euro#Investmenthttp://en.wikipedia.org/wiki/Euro#Tradehttp://en.wikipedia.org/wiki/Euro#Macroeconomic_stabilityhttp://en.wikipedia.org/wiki/Euro#Price_parityhttp://en.wikipedia.org/wiki/Euro#Transaction_costs_and_riskshttp://en.wikipedia.org/wiki/Euro#Optimal_currency_areahttp://en.wikipedia.org/wiki/Euro#Economicshttp://en.wikipedia.org/wiki/Euro#Currencies_pegged_to_the_eurohttp://en.wikipedia.org/wiki/Euro#Use_as_reserve_currencyhttp://en.wikipedia.org/wiki/Euro#Direct_usagehttp://en.wikipedia.org/wiki/Euro#Direct_and_indirect_usagehttp://en.wikipedia.org/wiki/Euro#Sovereign_debt_crisishttp://en.wikipedia.org/wiki/Euro#Introductionhttp://en.wikipedia.org/wiki/Euro#Historyhttp://en.wikipedia.org/wiki/Euro#Currency_signhttp://en.wikipedia.org/wiki/Euro#Payments_clearing.2C_electronic_funds_transferhttp://en.wikipedia.org/wiki/Euro#Coins_and_banknoteshttp://en.wikipedia.org/wiki/Euro#Characteristicshttp://en.wikipedia.org/wiki/Euro#Issuing_modalities_for_banknoteshttp://en.wikipedia.org/wiki/Euro#Administrationhttp://en.wikipedia.org/wiki/Euro


3/28

3

Administration

TheECBinFrankfurt, Germany, is in charge of the eurozone's monetary policy.

Main articles:European Central Bank,Maastricht Treaty, andEuro Group

The euro is managed and administered by theFrankfurt-basedEuropean Central Bank(ECB) and

theEurosystem(composed of thecentral banksof the eurozone countries). As an independent

central bank, the ECB has sole authority to setmonetary policy. The Eurosystem participates in the

printing, minting and distribution ofnotesandcoinsin all member states, and the operation of theeurozone payment systems.

The 1992Maastricht Treatyobliges most EU member states to adopt the euro upon meeting certain

monetary and budgetaryconvergence criteria, although not all states have done so. The United

Kingdom and Denmark negotiated exemptions, while Sweden (which joined the EU in 1995, after the

Maastricht Treaty was signed) turned down the euro in a 2003 referendum, and has circumvented

the obligation to adopt the euro by not meeting the monetary and budgetary requirements. All

nations that have joined the EU since 1993 have pledged to adopt the euro in due course.
http://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/Frankfurthttp://en.wikipedia.org/wiki/Frankfurthttp://en.wikipedia.org/wiki/Frankfurthttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Euro_Grouphttp://en.wikipedia.org/wiki/Euro_Grouphttp://en.wikipedia.org/wiki/Euro_Grouphttp://en.wikipedia.org/wiki/Frankfurthttp://en.wikipedia.org/wiki/Frankfurthttp://en.wikipedia.org/wiki/Frankfurthttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/Eurosystemhttp://en.wikipedia.org/wiki/Eurosystemhttp://en.wikipedia.org/wiki/Eurosystemhttp://en.wikipedia.org/wiki/Central_bankhttp://en.wikipedia.org/wiki/Central_bankhttp://en.wikipedia.org/wiki/Central_bankhttp://en.wikipedia.org/wiki/Monetary_policyhttp://en.wikipedia.org/wiki/Monetary_policyhttp://en.wikipedia.org/wiki/Monetary_policyhttp://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Euro_coinshttp://en.wikipedia.org/wiki/Euro_coinshttp://en.wikipedia.org/wiki/Euro_coinshttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/File:European_Central_Bank_041107.jpghttp://en.wikipedia.org/wiki/File:European_Central_Bank_041107.jpghttp://en.wikipedia.org/wiki/File:European_Central_Bank_041107.jpghttp://en.wikipedia.org/wiki/File:European_Central_Bank_041107.jpghttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Euro_coinshttp://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Monetary_policyhttp://en.wikipedia.org/wiki/Central_bankhttp://en.wikipedia.org/wiki/Eurosystemhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/Frankfurthttp://en.wikipedia.org/wiki/Euro_Grouphttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/Frankfurthttp://en.wikipedia.org/wiki/European_Central_Bank


4/28

4

Issuing modalities for banknotes

Since 5 January 2002, the national central banks (NCBs) and theECBhave issued euro banknotes

on a joint basis. Euro banknotes do not show which central bank issued them. Euro system NCBs

are required to accept euro banknotes put into circulation by other Euro system members and thesebanknotes are not repatriated. The ECB issues 8% of the total value of banknotes issued by the

Euro system. In practice, the ECBs banknotes are put into circulation by the NCBs, thereby

incurring matching liabilities vis--vis the ECB. These liabilities carry interest at the main refinancing

rate of the ECB. The other 92% of the euro banknotes are issued by the NCBs in proportion to their

respective shares in the capital key of the ECB, calculated using national share of European Union

population and national share of European Union GDP, equally weighted.
http://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bank


5/28

5

Characteristics

Coins and banknotes

Main articles:Euro coinsandEuro banknotes

All euro coins have a common side, and a national side (examples shown here) chosen by the issuing bank.

The euro is divided into 100cents(sometimes referred to as euro cents, especially when

distinguishing them from other currencies, and referred to as such on the common side of all cent

coins). In Community legislative acts the plural forms ofeuro and centare spelled without the s,

notwithstanding normal English usage. Otherwise, normal English plurals are recommended and

used, with manylocal variationssuch as 'centime' in France.
http://en.wikipedia.org/wiki/Euro_coinshttp://en.wikipedia.org/wiki/Euro_coinshttp://en.wikipedia.org/wiki/Euro_coinshttp://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Cent_(currency)http://en.wikipedia.org/wiki/Cent_(currency)http://en.wikipedia.org/wiki/Cent_(currency)http://en.wikipedia.org/wiki/Linguistic_issues_concerning_the_eurohttp://en.wikipedia.org/wiki/Linguistic_issues_concerning_the_eurohttp://en.wikipedia.org/wiki/Linguistic_issues_concerning_the_eurohttp://en.wikipedia.org/wiki/File:Euro_coins.jpghttp://en.wikipedia.org/wiki/File:Euro_coins.jpghttp://en.wikipedia.org/wiki/File:Euro_coins.jpghttp://en.wikipedia.org/wiki/File:Euro_coins.jpghttp://en.wikipedia.org/wiki/Linguistic_issues_concerning_the_eurohttp://en.wikipedia.org/wiki/Cent_(currency)http://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Euro_coins


6/28

6

All circulating coins have a common side showing the denomination or value, and a map in the

background. Due to thelinguistic plurality of Europe, the Latin alphabet version of euro is used (as

opposed to the less common Greek or Cyrillic) andArabic numerals(other text is used on national

sides in national languages, but other text on the common side is avoided). For the denominations

except the 1-, 2- and 5-cent coins, that map only showed the 15 member states which were

members when the euro was introduced. Beginning in 2007 or 2008 (depending on the country) theold map is being replaced by a map of Europe also showing countries outside the Union like

Norway. The 1-, 2- and 5-cent coins, however, keep their old design, showing a geographical map of

Europe with the 15 member states of 2002 raised somewhat above the rest of the map. All common

sides were designed byLuc Luycx. The coins also have a national side showing an image

specifically chosen by the country that issued the coin. Euro coins from any member state may be

freely used in any nation that has adopted the euro.

The common and national sides of the 2 coin

The coins are issued in2,1,50c,20c,10c,5c,2c, and1cdenominations. In order to avoid the

use of the two smallest coins, some cash transactions are rounded to the nearest five cents in the

Netherlands (by voluntary agreement) and in Finland (by law). This practice is discouraged by the

Commission, as is the practice of certain shops to refuse to accept high value euro notes.

Commemorative coinswith 2 face value have been issued with changes to the design of thenational side of the coin. These include both commonly issued coins, such as the 2

commemorative coin for the fiftieth anniversary of the signing of the Treaty of Rome, and nationally

issued coins, such as the coin to commemorate the2004 Summer Olympicsissued by Greece.

These coins are legal tender throughout the eurozone. Collector's coins with various other

denominations have been issued as well, but these are not intended for general circulation, and they

are legal tender only in the member state that issued them.
http://en.wikipedia.org/wiki/Languages_of_the_European_Unionhttp://en.wikipedia.org/wiki/Languages_of_the_European_Unionhttp://en.wikipedia.org/wiki/Languages_of_the_European_Unionhttp://en.wikipedia.org/wiki/Arabic_numeralshttp://en.wikipedia.org/wiki/Arabic_numeralshttp://en.wikipedia.org/wiki/Arabic_numeralshttp://en.wikipedia.org/wiki/Luc_Luycxhttp://en.wikipedia.org/wiki/Luc_Luycxhttp://en.wikipedia.org/wiki/Luc_Luycxhttp://en.wikipedia.org/wiki/2_euro_coinshttp://en.wikipedia.org/wiki/2_euro_coinshttp://en.wikipedia.org/wiki/2_euro_coinshttp://en.wikipedia.org/wiki/1_euro_coinshttp://en.wikipedia.org/wiki/1_euro_coinshttp://en.wikipedia.org/wiki/1_euro_coinshttp://en.wikipedia.org/wiki/50_cent_euro_coinshttp://en.wikipedia.org/wiki/50_cent_euro_coinshttp://en.wikipedia.org/wiki/50_cent_euro_coinshttp://en.wikipedia.org/wiki/20_cent_euro_coinshttp://en.wikipedia.org/wiki/20_cent_euro_coinshttp://en.wikipedia.org/wiki/20_cent_euro_coinshttp://en.wikipedia.org/wiki/10_cent_euro_coinshttp://en.wikipedia.org/wiki/10_cent_euro_coinshttp://en.wikipedia.org/wiki/10_cent_euro_coinshttp://en.wikipedia.org/wiki/5_cent_euro_coinshttp://en.wikipedia.org/wiki/5_cent_euro_coinshttp://en.wikipedia.org/wiki/5_cent_euro_coinshttp://en.wikipedia.org/wiki/2_cent_euro_coinshttp://en.wikipedia.org/wiki/2_cent_euro_coinshttp://en.wikipedia.org/wiki/2_cent_euro_coinshttp://en.wikipedia.org/wiki/1_cent_euro_coinshttp://en.wikipedia.org/wiki/1_cent_euro_coinshttp://en.wikipedia.org/wiki/1_cent_euro_coinshttp://en.wikipedia.org/wiki/%E2%82%AC2_commemorative_coinshttp://en.wikipedia.org/wiki/%E2%82%AC2_commemorative_coinshttp://en.wikipedia.org/wiki/2004_Summer_Olympicshttp://en.wikipedia.org/wiki/2004_Summer_Olympicshttp://en.wikipedia.org/wiki/2004_Summer_Olympicshttp://en.wikipedia.org/wiki/File:2_euro_coins.JPGhttp://en.wikipedia.org/wiki/File:2_euro_coins.JPGhttp://en.wikipedia.org/wiki/File:2_euro_coins.JPGhttp://en.wikipedia.org/wiki/File:2_euro_coins.JPGhttp://en.wikipedia.org/wiki/2004_Summer_Olympicshttp://en.wikipedia.org/wiki/%E2%82%AC2_commemorative_coinshttp://en.wikipedia.org/wiki/1_cent_euro_coinshttp://en.wikipedia.org/wiki/2_cent_euro_coinshttp://en.wikipedia.org/wiki/5_cent_euro_coinshttp://en.wikipedia.org/wiki/10_cent_euro_coinshttp://en.wikipedia.org/wiki/20_cent_euro_coinshttp://en.wikipedia.org/wiki/50_cent_euro_coinshttp://en.wikipedia.org/wiki/1_euro_coinshttp://en.wikipedia.org/wiki/2_euro_coinshttp://en.wikipedia.org/wiki/Luc_Luycxhttp://en.wikipedia.org/wiki/Arabic_numeralshttp://en.wikipedia.org/wiki/Languages_of_the_European_Union


7/28

7

The design for theeuro banknoteshas common designs on both sides. The design was created by

the Austrian designerRobert Kalina. Notes are issued in500,200,100,50,20,10,5. Each

banknote has its own colour and is dedicated to an artistic period of European architecture. The front

of the note features windows or gateways while the back has bridges, symbolizing links between

countries and with the future. While the designs are supposed to be devoid of any identifiable

characteristics, the initial designs byRobert Kalinawere of specific bridges, including theRialtoandthePont de Neuilly, and were subsequently rendered more generic; the final designs still bear very

close similarities to their specific prototypes; thus they are not truly generic. The monuments looked

similar enough to different national monuments to please everyone.

Payments clearing, electronic funds transfer

Main article:Single Euro Payments Area

Capital within the EU may be transferred in any amount from one country to another. All intra-EU

transfers in euro are treated as domestic transactions and bear the corresponding domestic transfer

costs.]This includes all member states of the EU, even those outside the eurozone providing the

transactions are carried out in euro. Credit/debit card charging and ATM withdrawals within the

eurozone are also treated as domestic transactions, however paper-based payment orders, like

cheques, have not been standardised so these are still domestic-based. The ECB has also set up

aclearing system,TARGET, for large euro transactions.

Currency sign

The euro sign;logotypeand handwritten

Main article:Euro sign
http://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Euro_banknoteshttp://en.wikipedia.org/wiki/Robert_Kalinahttp://en.wikipedia.org/wiki/Robert_Kalinahttp://en.wikipedia.org/wiki/Robert_Kalinahttp://en.wikipedia.org/wiki/500_euro_notehttp://en.wikipedia.org/wiki/500_euro_notehttp://en.wikipedia.org/wiki/500_euro_notehttp://en.wikipedia.org/wiki/200_euro_notehttp://en.wikipedia.org/wiki/200_euro_notehttp://en.wikipedia.org/wiki/200_euro_notehttp://en.wikipedia.org/wiki/100_euro_notehttp://en.wikipedia.org/wiki/100_euro_notehttp://en.wikipedia.org/wiki/100_euro_notehttp://en.wikipedia.org/wiki/50_euro_notehttp://en.wikipedia.org/wiki/50_euro_notehttp://en.wikipedia.org/wiki/50_euro_notehttp://en.wikipedia.org/wiki/20_euro_notehttp://en.wikipedia.org/wiki/20_euro_notehttp://en.wikipedia.org/wiki/20_euro_notehttp://en.wikipedia.org/wiki/10_euro_notehttp://en.wikipedia.org/wiki/10_euro_notehttp://en.wikipedia.org/wiki/10_euro_notehttp://en.wikipedia.org/wiki/5_euro_notehttp://en.wikipedia.org/wiki/5_euro_notehttp://en.wikipedia.org/wiki/5_euro_notehttp://en.wikipedia.org/wiki/Robert_Kalinahttp://en.wikipedia.org/wiki/Robert_Kalinahttp://en.wikipedia.org/wiki/Robert_Kalinahttp://en.wikipedia.org/wiki/Rialtohttp://en.wikipedia.org/wiki/Rialtohttp://en.wikipedia.org/wiki/Rialtohttp://en.wikipedia.org/wiki/Pont_de_Neuillyhttp://en.wikipedia.org/wiki/Pont_de_Neuillyhttp://en.wikipedia.org/wiki/Pont_de_Neuillyhttp://en.wikipedia.org/wiki/Single_Euro_Payments_Areahttp://en.wikipedia.org/wiki/Single_Euro_Payments_Areahttp://en.wikipedia.org/wiki/Single_Euro_Payments_Areahttp://en.wikipedia.org/wiki/Euro#cite_note-37http://en.wikipedia.org/wiki/Euro#cite_note-37http://en.wikipedia.org/wiki/Euro#cite_note-37http://en.wikipedia.org/wiki/Clearing_(finance)http://en.wikipedia.org/wiki/Clearing_(finance)http://en.wikipedia.org/wiki/Clearing_(finance)http://en.wikipedia.org/wiki/TARGEThttp://en.wikipedia.org/wiki/TARGEThttp://en.wikipedia.org/wiki/TARGEThttp://en.wikipedia.org/wiki/Logohttp://en.wikipedia.org/wiki/Logohttp://en.wikipedia.org/wiki/Logohttp://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/File:Euro_logo_plus_character.pnghttp://en.wikipedia.org/wiki/File:Euro_logo_plus_character.pnghttp://en.wikipedia.org/wiki/File:Euro_logo_plus_character.pnghttp://en.wikipedia.org/wiki/File:Euro_logo_plus_character.pnghttp://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/Logohttp://en.wikipedia.org/wiki/TARGEThttp://en.wikipedia.org/wiki/Clearing_(finance)http://en.wikipedia.org/wiki/Euro#cite_note-37http://en.wikipedia.org/wiki/Single_Euro_Payments_Areahttp://en.wikipedia.org/wiki/Pont_de_Neuillyhttp://en.wikipedia.org/wiki/Rialtohttp://en.wikipedia.org/wiki/Robert_Kalinahttp://en.wikipedia.org/wiki/5_euro_notehttp://en.wikipedia.org/wiki/10_euro_notehttp://en.wikipedia.org/wiki/20_euro_notehttp://en.wikipedia.org/wiki/50_euro_notehttp://en.wikipedia.org/wiki/100_euro_notehttp://en.wikipedia.org/wiki/200_euro_notehttp://en.wikipedia.org/wiki/500_euro_notehttp://en.wikipedia.org/wiki/Robert_Kalinahttp://en.wikipedia.org/wiki/Euro_banknotes


8/28

8

A specialeuro currency sign() was designed after a public survey had narrowed the original ten

proposals down to two. The European Commission then chose the design created by the Belgian

Alain Billiet. The official story of the design history of the euro sign is disputed byArthur

Eisenmenger, a former chief graphic designer for theEEC, who claims to have created it as a

generic symbol of Europe.

Inspiration for the symbol itself came from theGreek epsilon() a reference to the cradle of

European civilizationand the first letter of the word Europe, crossed by two parallel lines to certify

the stability of the euro.

European Commission.

The European Commission also specified a euro logo with exact proportions and

foreground/background colour tones. While the Commission intended the logo to be a prescribed

glyph shape, font designers made it clear that they intended to design their own variants

instead.Typewriterslacking the euro sign can create it by typing a capital 'C', backspacing

andoverstrikingit with the equal ('=') sign. Placement of the currency sign relative to the numericamount varies from nation to nation, but for texts in English the symbol (and theISO-standard

"EUR") should precede the amount.
http://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/Euro_signhttp://en.wikipedia.org/wiki/Arthur_Eisenmengerhttp://en.wikipedia.org/wiki/Arthur_Eisenmengerhttp://en.wikipedia.org/wiki/Arthur_Eisenmengerhttp://en.wikipedia.org/wiki/Arthur_Eisenmengerhttp://en.wikipedia.org/wiki/European_Communityhttp://en.wikipedia.org/wiki/European_Communityhttp://en.wikipedia.org/wiki/European_Communityhttp://en.wikipedia.org/wiki/Epsilonhttp://en.wikipedia.org/wiki/Epsilonhttp://en.wikipedia.org/wiki/Epsilonhttp://en.wikipedia.org/wiki/European_Commissionhttp://en.wikipedia.org/wiki/Typewriterhttp://en.wikipedia.org/wiki/Typewriterhttp://en.wikipedia.org/wiki/Typewriterhttp://en.wikipedia.org/wiki/Overstrikehttp://en.wikipedia.org/wiki/Overstrikehttp://en.wikipedia.org/wiki/Overstrikehttp://en.wikipedia.org/wiki/International_Organization_for_Standardizationhttp://en.wikipedia.org/wiki/International_Organization_for_Standardizationhttp://en.wikipedia.org/wiki/International_Organization_for_Standardizationhttp://en.wikipedia.org/wiki/International_Organization_for_Standardizationhttp://en.wikipedia.org/wiki/Overstrikehttp://en.wikipedia.org/wiki/Typewriterhttp://en.wikipedia.org/wiki/European_Commissionhttp://en.wikipedia.org/wiki/Epsilonhttp://en.wikipedia.org/wiki/European_Communityhttp://en.wikipedia.org/wiki/Arthur_Eisenmengerhttp://en.wikipedia.org/wiki/Arthur_Eisenmengerhttp://en.wikipedia.org/wiki/Euro_sign


9/28

9

History

Main article:History of the euro

Introduction

Preceding national currencies of the Eurozone

CurrencyCode

(ISO 4217)Rate

[30] Fixed on Yielded

Austrian schilling ATS 13.7603 1998-12-31 1999-01-01

Belgian franc BEF 40.3399 1998-12-31 1999-01-01

Cypriot pound CYP 0.585274 2007-07-10 2008-01-01

German mark DEM 1.95583 1998-12-31 1999-01-01

Estonian kroon EEK 15.6466 2010-07-13 2011-01-01

Spanish peseta ESP 166.386 1998-12-31 1999-01-01

Finnish markka FIM 5.94573 1998-12-31 1999-01-01

French franc FRF 6.55957 1998-12-31 1999-01-01

Greek drachma GRD 340.75 2000-06-19 2001-01-01

Irish pound IEP 0.787564 1998-12-31 1999-01-01

Italian lira ITL 1,936.27 1998-12-31 1999-01-01
http://en.wikipedia.org/wiki/History_of_the_eurohttp://en.wikipedia.org/wiki/History_of_the_eurohttp://en.wikipedia.org/wiki/History_of_the_eurohttp://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/Euro#cite_note-45http://en.wikipedia.org/wiki/Euro#cite_note-45http://en.wikipedia.org/wiki/Euro#cite_note-45http://en.wikipedia.org/wiki/Austrian_schillinghttp://en.wikipedia.org/wiki/Austrian_schillinghttp://en.wikipedia.org/wiki/Belgian_franchttp://en.wikipedia.org/wiki/Belgian_franchttp://en.wikipedia.org/wiki/Cypriot_poundhttp://en.wikipedia.org/wiki/Cypriot_poundhttp://en.wikipedia.org/wiki/German_markhttp://en.wikipedia.org/wiki/German_markhttp://en.wikipedia.org/wiki/Estonian_kroonhttp://en.wikipedia.org/wiki/Estonian_kroonhttp://en.wikipedia.org/wiki/Spanish_pesetahttp://en.wikipedia.org/wiki/Spanish_pesetahttp://en.wikipedia.org/wiki/Finnish_markkahttp://en.wikipedia.org/wiki/Finnish_markkahttp://en.wikipedia.org/wiki/French_franchttp://en.wikipedia.org/wiki/French_franchttp://en.wikipedia.org/wiki/Greek_drachmahttp://en.wikipedia.org/wiki/Greek_drachmahttp://en.wikipedia.org/wiki/Irish_poundhttp://en.wikipedia.org/wiki/Irish_poundhttp://en.wikipedia.org/wiki/Italian_lirahttp://en.wikipedia.org/wiki/Italian_lirahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Italian_lirahttp://en.wikipedia.org/wiki/Irish_poundhttp://en.wikipedia.org/wiki/Greek_drachmahttp://en.wikipedia.org/wiki/French_franchttp://en.wikipedia.org/wiki/Finnish_markkahttp://en.wikipedia.org/wiki/Spanish_pesetahttp://en.wikipedia.org/wiki/Estonian_kroonhttp://en.wikipedia.org/wiki/German_markhttp://en.wikipedia.org/wiki/Cypriot_poundhttp://en.wikipedia.org/wiki/Belgian_franchttp://en.wikipedia.org/wiki/Austrian_schillinghttp://en.wikipedia.org/wiki/Euro#cite_note-45http://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/History_of_the_euro


10/28

10

Preceding national currencies of the Eurozone

CurrencyCode

(ISO 4217)Rate

[30] Fixed on Yielded

Luxembourgish franc LUF 40.3399 1998-12-31 1999-01-01

Monegasque franc MCF 6.55957 1998-12-31 1999-01-01

Maltese lira MTL 0.4293 2007-07-10 2008-01-01

Dutch guilder NLG 2.20371 1998-12-31 1999-01-01

Portuguese escudo PTE 200.482 1998-12-31 1999-01-01

Slovenian tolar SIT 239.64 2006-07-11 2007-01-01

Slovak koruna SKK 30.126 2008-07-08 2009-01-01

Sammarinese lira SML 1,936.27 1998-12-31 1999-01-01

Vatican lira VAL 1,936.27 1998-12-31 1999-01-01

The euro was established by the provisions in the 1992Maastricht Treaty. To participate in the

currency, member states are meant to meetstrict criteria, such as a budgetdeficitof less than three

per cent of their GDP, a debt ratio of less than sixty per cent of GDP (both of which were ultimately

widely flouted after introduction), low inflation, andinterestrates close to the EU average. In the

Maastricht Treaty, the United Kingdom and Denmark were granted exemptions per their request

from moving to the stage of monetary union which would result in the introduction of the euro.

Economists who helped create or contributed to the euro includeFred Arditti,Neil Dowling,Wim

Duisenberg,Robert Mundell,Tommaso Padoa-SchioppaandRobert Tollison.

The name "euro" was officially adopted inMadridon 16 December 1995.

BelgianEsperantistGermain Pirlot, a former teacher of French and history is credited with naming

the new currency by sending a letter to then President of the European Commission, Jacques

Santer, suggesting the name "euro" on 4 August 1995.
http://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/Euro#cite_note-45http://en.wikipedia.org/wiki/Euro#cite_note-45http://en.wikipedia.org/wiki/Euro#cite_note-45http://en.wikipedia.org/wiki/Luxembourgish_franchttp://en.wikipedia.org/wiki/Luxembourgish_franchttp://en.wikipedia.org/wiki/Monegasque_franchttp://en.wikipedia.org/wiki/Monegasque_franchttp://en.wikipedia.org/wiki/Maltese_lirahttp://en.wikipedia.org/wiki/Maltese_lirahttp://en.wikipedia.org/wiki/Dutch_guilderhttp://en.wikipedia.org/wiki/Dutch_guilderhttp://en.wikipedia.org/wiki/Portuguese_escudohttp://en.wikipedia.org/wiki/Portuguese_escudohttp://en.wikipedia.org/wiki/Slovenian_tolarhttp://en.wikipedia.org/wiki/Slovenian_tolarhttp://en.wikipedia.org/wiki/Slovak_korunahttp://en.wikipedia.org/wiki/Slovak_korunahttp://en.wikipedia.org/wiki/Sammarinese_lirahttp://en.wikipedia.org/wiki/Sammarinese_lirahttp://en.wikipedia.org/wiki/Vatican_lirahttp://en.wikipedia.org/wiki/Vatican_lirahttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/Government_budget_deficithttp://en.wikipedia.org/wiki/Government_budget_deficithttp://en.wikipedia.org/wiki/Government_budget_deficithttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/w/index.php?title=Fred_Arditti&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Fred_Arditti&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Fred_Arditti&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Neil_Dowling&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Neil_Dowling&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Neil_Dowling&action=edit&redlink=1http://en.wikipedia.org/wiki/Wim_Duisenberghttp://en.wikipedia.org/wiki/Wim_Duisenberghttp://en.wikipedia.org/wiki/Wim_Duisenberghttp://en.wikipedia.org/wiki/Wim_Duisenberghttp://en.wikipedia.org/wiki/Robert_Mundellhttp://en.wikipedia.org/wiki/Robert_Mundellhttp://en.wikipedia.org/wiki/Robert_Mundellhttp://en.wikipedia.org/wiki/Tommaso_Padoa-Schioppahttp://en.wikipedia.org/wiki/Tommaso_Padoa-Schioppahttp://en.wikipedia.org/wiki/Tommaso_Padoa-Schioppahttp://en.wikipedia.org/wiki/Robert_Tollisonhttp://en.wikipedia.org/wiki/Robert_Tollisonhttp://en.wikipedia.org/wiki/Robert_Tollisonhttp://en.wikipedia.org/wiki/Madridhttp://en.wikipedia.org/wiki/Madridhttp://en.wikipedia.org/wiki/Madridhttp://en.wikipedia.org/wiki/Esperantisthttp://en.wikipedia.org/wiki/Esperantisthttp://en.wikipedia.org/wiki/Germain_Pirlothttp://en.wikipedia.org/wiki/Germain_Pirlothttp://en.wikipedia.org/wiki/Germain_Pirlothttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Germain_Pirlothttp://en.wikipedia.org/wiki/Esperantisthttp://en.wikipedia.org/wiki/Madridhttp://en.wikipedia.org/wiki/Robert_Tollisonhttp://en.wikipedia.org/wiki/Tommaso_Padoa-Schioppahttp://en.wikipedia.org/wiki/Robert_Mundellhttp://en.wikipedia.org/wiki/Wim_Duisenberghttp://en.wikipedia.org/wiki/Wim_Duisenberghttp://en.wikipedia.org/w/index.php?title=Neil_Dowling&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Fred_Arditti&action=edit&redlink=1http://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Government_budget_deficithttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/Vatican_lirahttp://en.wikipedia.org/wiki/Sammarinese_lirahttp://en.wikipedia.org/wiki/Slovak_korunahttp://en.wikipedia.org/wiki/Slovenian_tolarhttp://en.wikipedia.org/wiki/Portuguese_escudohttp://en.wikipedia.org/wiki/Dutch_guilderhttp://en.wikipedia.org/wiki/Maltese_lirahttp://en.wikipedia.org/wiki/Monegasque_franchttp://en.wikipedia.org/wiki/Luxembourgish_franchttp://en.wikipedia.org/wiki/Euro#cite_note-45http://en.wikipedia.org/wiki/ISO_4217


11/28

11

Due to differences in national conventions for rounding and significant digits, all conversion between

the national currencies had to be carried out using the process of triangulation via the euro.

The definitive values of one euro in terms of theexchange ratesat which the currency entered the

euro are shown on the right.

The rates were determined by the Council of the European Union, based on a recommendation from

the European Commission based on the market rates on 31 December 1998. They were set so thatoneEuropean Currency Unit(ECU) would equal one euro. The European Currency Unit was an

accounting unit used by the EU, based on the currencies of the member states; it was not a currency

in its own right. They could not be set earlier, because the ECU depended on the closing exchange

rate of the non-euro currencies (principally thepound sterling) that day.

The procedure used to fix the irrevocable conversion rate between theGreek drachmaand the euro

was different, since the euro by then was already two years old. While the conversion rates for the

initial eleven currencies were determined only hours before the euro was introduced, the conversion

rate for the Greek drachma was fixed several months beforehand.

The currency was introduced in non-physical form (traveller's cheques), electronic transfers,

banking, etc.) at midnight on 1 January 1999, when the national currencies of participating countries

(the euro zone) ceased to exist independently. Their exchange rates were locked at fixed rates

against each other. The euro thus became the successor to theEuropean Currency Unit(ECU). The

notes and coins for the old currencies, however, continued to be used aslegal tenderuntil new euro

notes and coins were introduced on 1 January 2002.

The changeover period during which the former currencies' notes and coins were exchanged for

those of the euro lasted about two months, until 28 February 2002. The official date on which thenational currencies ceased to be legal tender varied from member state to member state. The

earliest date was in Germany, where themarkofficially ceased to be legal tender on 31 December

2001, though the exchange period lasted for two months more. Even after the old currencies ceased

to be legal tender, they continued to be accepted by national central banks for periods ranging from

several years to forever (the latter in Austria, Germany, Ireland and Spain). The earliest coins to

become non-convertible were the Portuguese escudos, which ceased to have monetary value after

31 December 2002, although banknotes remain exchangeable until 2022.
http://en.wikipedia.org/wiki/Exchange_ratehttp://en.wikipedia.org/wiki/Exchange_ratehttp://en.wikipedia.org/wiki/Exchange_ratehttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/Pound_sterlinghttp://en.wikipedia.org/wiki/Pound_sterlinghttp://en.wikipedia.org/wiki/Pound_sterlinghttp://en.wikipedia.org/wiki/Greek_drachmahttp://en.wikipedia.org/wiki/Greek_drachmahttp://en.wikipedia.org/wiki/Greek_drachmahttp://en.wikipedia.org/wiki/Traveller%27s_chequehttp://en.wikipedia.org/wiki/Traveller%27s_chequehttp://en.wikipedia.org/wiki/Traveller%27s_chequehttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/Legal_tenderhttp://en.wikipedia.org/wiki/Legal_tenderhttp://en.wikipedia.org/wiki/Legal_tenderhttp://en.wikipedia.org/wiki/Deutsche_Markhttp://en.wikipedia.org/wiki/Deutsche_Markhttp://en.wikipedia.org/wiki/Deutsche_Markhttp://en.wikipedia.org/wiki/Deutsche_Markhttp://en.wikipedia.org/wiki/Legal_tenderhttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/Traveller%27s_chequehttp://en.wikipedia.org/wiki/Greek_drachmahttp://en.wikipedia.org/wiki/Pound_sterlinghttp://en.wikipedia.org/wiki/European_Currency_Unithttp://en.wikipedia.org/wiki/Exchange_rate


12/28

12

Sovereign debt crisis

Main article:European sovereign-debt crisis

Budget deficit of the euro area compared to USA and UK.

Following the US financial crisis in 2008, fears of asovereign debt crisisdeveloped in 2009 among

fiscally conservative investors concerning some European states, with the situation becoming

particularly tense inearly 2010. This included euro zone

membersGreece,IrelandandPortugaland also someEUcountries outside the area.Iceland, the

country which experienced the largestcrisis in 2008when its entire international banking system

collapsed, has emerged less affected by the sovereign-debt crisis as the government was unable tobail the banks out. In the EU, especially in countries where sovereign debts have increased sharply

due to bank bailouts, a crisis of confidence has emerged with the widening ofbondyield

spreadsand risk insurance oncredit default swapsbetween these countries and other EU members,

most importantly Germany. To be included in the euro zone, the countries had to fulfil

certainconvergence criteria, but the meaningfulness of such criteria was diminished by the fact they

have not been applied to different countries with the same strictness.
http://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/Sovereign_debt_crisishttp://en.wikipedia.org/wiki/Sovereign_debt_crisishttp://en.wikipedia.org/wiki/Sovereign_debt_crisishttp://en.wikipedia.org/wiki/2000s_European_sovereign_debt_crisis_timelinehttp://en.wikipedia.org/wiki/2000s_European_sovereign_debt_crisis_timelinehttp://en.wikipedia.org/wiki/2000s_European_sovereign_debt_crisis_timelinehttp://en.wikipedia.org/wiki/Economy_of_Greecehttp://en.wikipedia.org/wiki/Economy_of_Greecehttp://en.wikipedia.org/wiki/Economy_of_Greecehttp://en.wikipedia.org/wiki/Economy_of_Irelandhttp://en.wikipedia.org/wiki/Economy_of_Irelandhttp://en.wikipedia.org/wiki/Economy_of_Irelandhttp://en.wikipedia.org/wiki/Economy_of_Portugalhttp://en.wikipedia.org/wiki/Economy_of_Portugalhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Icelandhttp://en.wikipedia.org/wiki/Icelandhttp://en.wikipedia.org/wiki/Icelandhttp://en.wikipedia.org/wiki/2008%E2%80%932012_Icelandic_financial_crisishttp://en.wikipedia.org/wiki/2008%E2%80%932012_Icelandic_financial_crisishttp://en.wikipedia.org/wiki/2008%E2%80%932012_Icelandic_financial_crisishttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Yield_spreadhttp://en.wikipedia.org/wiki/Yield_spreadhttp://en.wikipedia.org/wiki/Yield_spreadhttp://en.wikipedia.org/wiki/Yield_spreadhttp://en.wikipedia.org/wiki/Credit_default_swapshttp://en.wikipedia.org/wiki/Credit_default_swapshttp://en.wikipedia.org/wiki/Credit_default_swapshttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/File:Government_surplus_or_deficit_(EU-USA-UK).pnghttp://en.wikipedia.org/wiki/File:Government_surplus_or_deficit_(EU-USA-UK).pnghttp://en.wikipedia.org/wiki/File:Government_surplus_or_deficit_(EU-USA-UK).pnghttp://en.wikipedia.org/wiki/File:Government_surplus_or_deficit_(EU-USA-UK).pnghttp://en.wikipedia.org/wiki/Convergence_criteriahttp://en.wikipedia.org/wiki/Credit_default_swapshttp://en.wikipedia.org/wiki/Yield_spreadhttp://en.wikipedia.org/wiki/Yield_spreadhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/2008%E2%80%932012_Icelandic_financial_crisishttp://en.wikipedia.org/wiki/Icelandhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Economy_of_Portugalhttp://en.wikipedia.org/wiki/Economy_of_Irelandhttp://en.wikipedia.org/wiki/Economy_of_Greecehttp://en.wikipedia.org/wiki/2000s_European_sovereign_debt_crisis_timelinehttp://en.wikipedia.org/wiki/Sovereign_debt_crisishttp://en.wikipedia.org/wiki/European_sovereign-debt_crisis


13/28

13

According to theEconomist Intelligence Unitin 2011, "[I]f the [euro area] is treated as a single entity,

its [economic and fiscal] position looks no worse and in some respects, rather better than that of theUS or the UK" and the budget deficit for the euro area as a whole is much lower and the euro area's

government debt/GDP ratio of 86% in 2010 was about the same level as that of the US. "Moreover,"

they write, "private-sector indebtedness across the euro area as a whole is markedly lower than in

the highly leveraged Anglo-Saxon economies." The authors conclude that the crisis "is as much

political as economic" and the result of the fact that the euro area lacks the support of

"institutionalparaphernalia(and mutual bonds of solidarity) of a state".

The crisis continued with S&P downgrading nine euro-area countries, including France, then

downgrading the entireEuropean Financial Stability Facility(EFSF) fund.

]

In May 2012, socialistFranois Hollandewas elected as president of France and a month later the

French socialist legislative position was strengthened, while German leaderAngela Merkel"has

appeared to be floundering and been badly let down by her advisers in recent months", one

commentator said. As such, "serious discord between French and German monetary decision-

makers was [comparable to that of] ... 199293, at the height of the crisis over theEuropean

Monetary System, the forerunner to EMU" (European Monetary Union). "[H]itherto relatively dormant

signs ofeuro skepticismin German public opinion and throughout industry have been multiplying in

recent months, making Hollandes proposals increasingly unpalatable to a broad swathe of German

opinion. Although considerable controversy will continue to swirl over Greece and Spain, the real

battle lines over the future of the euro will be drawn up between Germany and France," thecommentary concluded. Another historical parallel to 1931 when Germany was burdened with

debt, unemployment and austerity while France and the US were relatively strong creditors gained

attentionin summer 2012 even as Germany received adebt-ratingwarning of its own.
http://en.wikipedia.org/wiki/Economist_Intelligence_Unithttp://en.wikipedia.org/wiki/Economist_Intelligence_Unithttp://en.wikipedia.org/wiki/Economist_Intelligence_Unithttp://en.wikipedia.org/wiki/Paraphernaliahttp://en.wikipedia.org/wiki/Paraphernaliahttp://en.wikipedia.org/wiki/Paraphernaliahttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/Fran%C3%A7ois_Hollandehttp://en.wikipedia.org/wiki/Fran%C3%A7ois_Hollandehttp://en.wikipedia.org/wiki/Fran%C3%A7ois_Hollandehttp://en.wikipedia.org/wiki/Angela_Merkelhttp://en.wikipedia.org/wiki/Angela_Merkelhttp://en.wikipedia.org/wiki/Angela_Merkelhttp://en.wikipedia.org/wiki/European_Monetary_Systemhttp://en.wikipedia.org/wiki/European_Monetary_Systemhttp://en.wikipedia.org/wiki/European_Monetary_Systemhttp://en.wikipedia.org/wiki/European_Monetary_Systemhttp://en.wikipedia.org/wiki/European_Monetary_Unionhttp://en.wikipedia.org/wiki/European_Monetary_Unionhttp://en.wikipedia.org/wiki/European_Monetary_Unionhttp://en.wikipedia.org/wiki/Euroscepticismhttp://en.wikipedia.org/wiki/Euroscepticismhttp://en.wikipedia.org/wiki/Euroscepticismhttp://en.wikipedia.org/wiki/Liaquat_Ahamed#Lords_of_Financehttp://en.wikipedia.org/wiki/Liaquat_Ahamed#Lords_of_Financehttp://en.wikipedia.org/wiki/Liaquat_Ahamed#Lords_of_Financehttp://en.wikipedia.org/wiki/Liaquat_Ahamed#Lords_of_Financehttp://en.wikipedia.org/wiki/Bond_credit_rating#Credit_rating_agencieshttp://en.wikipedia.org/wiki/Bond_credit_rating#Credit_rating_agencieshttp://en.wikipedia.org/wiki/Bond_credit_rating#Credit_rating_agencieshttp://en.wikipedia.org/wiki/Bond_credit_rating#Credit_rating_agencieshttp://en.wikipedia.org/wiki/Liaquat_Ahamed#Lords_of_Financehttp://en.wikipedia.org/wiki/Liaquat_Ahamed#Lords_of_Financehttp://en.wikipedia.org/wiki/Euroscepticismhttp://en.wikipedia.org/wiki/European_Monetary_Unionhttp://en.wikipedia.org/wiki/European_Monetary_Systemhttp://en.wikipedia.org/wiki/European_Monetary_Systemhttp://en.wikipedia.org/wiki/Angela_Merkelhttp://en.wikipedia.org/wiki/Fran%C3%A7ois_Hollandehttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/Paraphernaliahttp://en.wikipedia.org/wiki/Economist_Intelligence_Unit


14/28

14

Direct and indirect usage

Further information:Eurozone,International status and usage of the euro, andEnlargement of the

eurozone

Andorra

Bulgaria

Czech

Rep.

Denmark

E U R O Z O N E Hungary

Kosovo

Latvia

Lithuania

Monaco

Monten.

Poland

Romania

San Marino

Sweden

United

Kingdom

Vatican

Eurozone
http://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/Andorran_euro_coinshttp://en.wikipedia.org/wiki/Bulgaria_and_the_eurohttp://en.wikipedia.org/wiki/Czech_Republic_and_the_eurohttp://en.wikipedia.org/wiki/Czech_Republic_and_the_eurohttp://en.wikipedia.org/wiki/Denmark_and_the_eurohttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Hungary_and_the_eurohttp://en.wikipedia.org/wiki/Kosovo_and_the_eurohttp://en.wikipedia.org/wiki/Latvian_euro_coinshttp://en.wikipedia.org/wiki/Lithuanian_euro_coinshttp://en.wikipedia.org/wiki/Monaco_and_the_eurohttp://en.wikipedia.org/wiki/Montenegro_and_the_eurohttp://en.wikipedia.org/wiki/Poland_and_the_eurohttp://en.wikipedia.org/wiki/Romania_and_the_eurohttp://en.wikipedia.org/wiki/Sammarinese_euro_coinshttp://en.wikipedia.org/wiki/Sweden_and_the_eurohttp://en.wikipedia.org/wiki/United_Kingdom_and_the_eurohttp://en.wikipedia.org/wiki/United_Kingdom_and_the_eurohttp://en.wikipedia.org/wiki/Vatican_euro_coinshttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/File:Eurozone_map.svghttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Vatican_euro_coinshttp://en.wikipedia.org/wiki/United_Kingdom_and_the_eurohttp://en.wikipedia.org/wiki/United_Kingdom_and_the_eurohttp://en.wikipedia.org/wiki/Sweden_and_the_eurohttp://en.wikipedia.org/wiki/Sammarinese_euro_coinshttp://en.wikipedia.org/wiki/Romania_and_the_eurohttp://en.wikipedia.org/wiki/Poland_and_the_eurohttp://en.wikipedia.org/wiki/Montenegro_and_the_eurohttp://en.wikipedia.org/wiki/Monaco_and_the_eurohttp://en.wikipedia.org/wiki/Lithuanian_euro_coinshttp://en.wikipedia.org/wiki/Latvian_euro_coinshttp://en.wikipedia.org/wiki/Kosovo_and_the_eurohttp://en.wikipedia.org/wiki/Hungary_and_the_eurohttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Denmark_and_the_eurohttp://en.wikipedia.org/wiki/Czech_Republic_and_the_eurohttp://en.wikipedia.org/wiki/Czech_Republic_and_the_eurohttp://en.wikipedia.org/wiki/Bulgaria_and_the_eurohttp://en.wikipedia.org/wiki/Andorran_euro_coinshttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/Eurozone


15/28

15

ERM II

other EU members

monetary agreement

unilaterally adopted

Direct usage

The euro is the sole currency of 17EU member

states:Austria,Belgium,Cyprus,Estonia,Finland,France,Germany,Greece,Ireland,Italy,Luxembo

urg,Malta, theNetherlands,Portugal,Slovakia,Slovenia, andSpain. These countries comprise the

"eurozone", some 326 million people in total.

With all but two of the remaining EU members obliged to join, together with future members of the

EU, theenlargement of the eurozoneis set to continue. Outside the EU, the euro is also the sole

currency ofMontenegroandKosovoand several European micro states (Andorra,Monaco,San

Marinoand theVatican City) as well as in three overseas territories of EU states that are not

themselves part of the EU (Mayotte,Saint Pierre and MiquelonandAkrotiri and Dhekelia). Together

this direct usage of the euro outside the EU affects over 3 million people.

It is also gaining increasing international usage as a trading currency, in Cuba, [North Korea and

Syria. There are also various currencies pegged to the euro (see below). In 2009, Zimbabwe

abandoned itslocal currencyand used major currencies instead, including the euro and the United

States dollar.

Use as reserve currency

Since its introduction, the euro has been the second most widely held international reserve

currencyafter the US dollar. The share of the euro as a reserve currency has increased from 18% in

1999 to 27% in 2008. Over this period the share of the US dollar fell from 71% to 64% and the Yen

fell from 6.4% to 3.3%. The euro inherited and built on the status of the Deutsche Markas the

second most important reserve currency. The euro remains underweight as a reserve currency in

advanced economies while overweight in emerging and developing economies: according to

theInternational Monetary Fund. the total of euro held as a reserve in the world at the end of 2008

was equal to $1.1 trillion or 850 billion, with a share of 22% of all currency reserves in advanced

economies, but a total of 31% of all currency reserves in emerging and developing economies.

The possibility of the euro becoming the first international reserve currency is now widely debated

among economists. FormerFederal ReserveChairmanAlan Greenspangave his opinion in

September 2007 that it is "absolutely conceivable that the euro will replace the US dollar as reserve
http://en.wikipedia.org/wiki/European_Exchange_Rate_Mechanism#Current_status_of_the_ERM_IIhttp://en.wikipedia.org/wiki/European_Exchange_Rate_Mechanism#Current_status_of_the_ERM_IIhttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_euro#Sovereign_stateshttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_euro#Sovereign_stateshttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_euro#Other_usershttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_euro#Other_usershttp://en.wikipedia.org/wiki/European_Union_member_stateshttp://en.wikipedia.org/wiki/European_Union_member_stateshttp://en.wikipedia.org/wiki/European_Union_member_stateshttp://en.wikipedia.org/wiki/European_Union_member_stateshttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/Montenegrohttp://en.wikipedia.org/wiki/Montenegrohttp://en.wikipedia.org/wiki/Montenegrohttp://en.wikipedia.org/wiki/Kosovohttp://en.wikipedia.org/wiki/Kosovohttp://en.wikipedia.org/wiki/Kosovohttp://en.wikipedia.org/wiki/Andorrahttp://en.wikipedia.org/wiki/Andorrahttp://en.wikipedia.org/wiki/Andorrahttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/Mayottehttp://en.wikipedia.org/wiki/Mayottehttp://en.wikipedia.org/wiki/Mayottehttp://en.wikipedia.org/wiki/Saint_Pierre_and_Miquelonhttp://en.wikipedia.org/wiki/Saint_Pierre_and_Miquelonhttp://en.wikipedia.org/wiki/Saint_Pierre_and_Miquelonhttp://en.wikipedia.org/wiki/Akrotiri_and_Dhekeliahttp://en.wikipedia.org/wiki/Akrotiri_and_Dhekeliahttp://en.wikipedia.org/wiki/Akrotiri_and_Dhekeliahttp://en.wikipedia.org/wiki/Zimbabwean_dollarhttp://en.wikipedia.org/wiki/Zimbabwean_dollarhttp://en.wikipedia.org/wiki/Zimbabwean_dollarhttp://en.wikipedia.org/wiki/Reserve_currencyhttp://en.wikipedia.org/wiki/Reserve_currencyhttp://en.wikipedia.org/wiki/Reserve_currencyhttp://en.wikipedia.org/wiki/Reserve_currencyhttp://en.wikipedia.org/wiki/Deutsche_Markhttp://en.wikipedia.org/wiki/Deutsche_Markhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/Federal_Reservehttp://en.wikipedia.org/wiki/Federal_Reservehttp://en.wikipedia.org/wiki/Federal_Reservehttp://en.wikipedia.org/wiki/Alan_Greenspanhttp://en.wikipedia.org/wiki/Alan_Greenspanhttp://en.wikipedia.org/wiki/Alan_Greenspanhttp://en.wikipedia.org/wiki/Alan_Greenspanhttp://en.wikipedia.org/wiki/Federal_Reservehttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/Deutsche_Markhttp://en.wikipedia.org/wiki/Reserve_currencyhttp://en.wikipedia.org/wiki/Reserve_currencyhttp://en.wikipedia.org/wiki/Zimbabwean_dollarhttp://en.wikipedia.org/wiki/Akrotiri_and_Dhekeliahttp://en.wikipedia.org/wiki/Saint_Pierre_and_Miquelonhttp://en.wikipedia.org/wiki/Mayottehttp://en.wikipedia.org/wiki/Vatican_Cityhttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/San_Marinohttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Andorrahttp://en.wikipedia.org/wiki/Kosovohttp://en.wikipedia.org/wiki/Montenegrohttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Sloveniahttp://en.wikipedia.org/wiki/Slovakiahttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Maltahttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Finlandhttp://en.wikipedia.org/wiki/Estoniahttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/European_Union_member_stateshttp://en.wikipedia.org/wiki/European_Union_member_stateshttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_euro#Other_usershttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_euro#Sovereign_stateshttp://en.wikipedia.org/wiki/Enlargement_of_the_eurozonehttp://en.wikipedia.org/wiki/European_Exchange_Rate_Mechanism#Current_status_of_the_ERM_II


16/28

16

currency, or will be traded as an equally important reserve currency." In contrast to Greenspan's

2007 assessment, the euro's increase in the share of the worldwide currency reserve basket has

slowed considerably since 2007 and since the beginning of the worldwide credit crunchrelated

recession andEuropean sovereign-debt crisis.

Currencies pegged to the euro

Main article:International status and usage of the euro

Worldwide use of the euro and the US dollar:

Eurozone

External adopters of the euroCurrencies pegged to the euro

Currencies pegged to the euro within narrow band

United States

External adopters of the US dollar

Currencies pegged to the US dollar

Currencies pegged to the US dollar within narrow band

Note that theBelarusian rubleis pegged to the Euro,Russian rubleand US$ in a currency

basket.

Outside the euro zone, a total of 23 countries and territories that do not belong to the EU havecurrencies that are directly pegged to the euro including 14 countries in mainland Africa (CFA

francandMoroccan dirham), two African island countries (Comorian francandCape Verdean

escudo), three French Pacific territories (CFP franc) and another Balkan country, Bosnia and

Herzegovina (Bosnia and Herzegovina convertible mark). On 28 July 2009, So Tom and Prncipe

signed an agreement with Portugal which will eventually tie its currency to the euro.
http://en.wikipedia.org/wiki/Credit_crunchhttp://en.wikipedia.org/wiki/Credit_crunchhttp://en.wikipedia.org/wiki/Credit_crunchhttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Belarusian_rublehttp://en.wikipedia.org/wiki/Belarusian_rublehttp://en.wikipedia.org/wiki/Belarusian_rublehttp://en.wikipedia.org/wiki/Russian_rublehttp://en.wikipedia.org/wiki/Russian_rublehttp://en.wikipedia.org/wiki/Russian_rublehttp://en.wikipedia.org/wiki/CFA_franchttp://en.wikipedia.org/wiki/CFA_franchttp://en.wikipedia.org/wiki/CFA_franchttp://en.wikipedia.org/wiki/CFA_franchttp://en.wikipedia.org/wiki/Moroccan_dirhamhttp://en.wikipedia.org/wiki/Moroccan_dirhamhttp://en.wikipedia.org/wiki/Moroccan_dirhamhttp://en.wikipedia.org/wiki/Comorian_franchttp://en.wikipedia.org/wiki/Comorian_franchttp://en.wikipedia.org/wiki/Comorian_franchttp://en.wikipedia.org/wiki/Cape_Verdean_escudohttp://en.wikipedia.org/wiki/Cape_Verdean_escudohttp://en.wikipedia.org/wiki/Cape_Verdean_escudohttp://en.wikipedia.org/wiki/Cape_Verdean_escudohttp://en.wikipedia.org/wiki/CFP_franchttp://en.wikipedia.org/wiki/CFP_franchttp://en.wikipedia.org/wiki/CFP_franchttp://en.wikipedia.org/wiki/Bosnia_and_Herzegovina_convertible_markhttp://en.wikipedia.org/wiki/Bosnia_and_Herzegovina_convertible_markhttp://en.wikipedia.org/wiki/Bosnia_and_Herzegovina_convertible_markhttp://en.wikipedia.org/wiki/File:DOLLAR_AND_EURO_IN_THE_WORLD.svghttp://en.wikipedia.org/wiki/File:DOLLAR_AND_EURO_IN_THE_WORLD.svghttp://en.wikipedia.org/wiki/File:DOLLAR_AND_EURO_IN_THE_WORLD.svghttp://en.wikipedia.org/wiki/File:DOLLAR_AND_EURO_IN_THE_WORLD.svghttp://en.wikipedia.org/wiki/Bosnia_and_Herzegovina_convertible_markhttp://en.wikipedia.org/wiki/CFP_franchttp://en.wikipedia.org/wiki/Cape_Verdean_escudohttp://en.wikipedia.org/wiki/Cape_Verdean_escudohttp://en.wikipedia.org/wiki/Comorian_franchttp://en.wikipedia.org/wiki/Moroccan_dirhamhttp://en.wikipedia.org/wiki/CFA_franchttp://en.wikipedia.org/wiki/CFA_franchttp://en.wikipedia.org/wiki/Russian_rublehttp://en.wikipedia.org/wiki/Belarusian_rublehttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/International_status_and_usage_of_the_eurohttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/Credit_crunch


17/28

17

With the exception of Bosnia (which pegged its currency against the Deutsche Mark) and Cape

Verde (formerly pegged to the Portuguese escudo) all of these non-EU countries had a currency peg

to the French Franc before pegging their currencies to the euro. Pegging a country's currency to a

major currency is regarded as a safety measure, especially for currencies of areas with weak

economies, as the euro is seen as a stable currency, prevents runaway inflation and encourages

foreign investment due to its stability.Within the EU several currencies have a peg to the euro, in most instances as a precondition to

joining the eurozone. TheBulgarian levwas formerly pegged to the Deutsche Mark, other EU

member states have a direct peg due to ERM II: theDanish krone, theLithuanian litasand

theLatvian lats.

In total, over 150 million people in Africa use a currency pegged to the euro, 25 million people

outside the eurozone in Europe and another 500,000 people on Pacific islands.

Economics

Optimal currency area

Further information:Optimum currency area

In economics, an optimum currency area (or region) (OCA, or OCR) is a geographical region in

which it would maximize economic efficiency to have the entire region share a single currency.

There are two models, both proposed byRobert Mundell: thestationary expectations modeland

theinternational risk sharing model. Mundell himself advocates the international risk sharing modeland thus concludes in favour of the euro. However, even before the creation of the single currency,

there were concerns over diverging economies. Before theLate-2000s recessionthe chances of a

state leaving the euro, or the chances that the whole zone would collapse, were considered

extremely slim. However theGreek government-debt crisisled to former British foreign

secretaryJack Strawclaiming the Eurozone could not last in its current form.[53]Part of the problem

seems to be the rules that were created when the Euro was set up. John Lanchester, writing for The

New Yorkerexplains it thus:

The guiding principle of the currency, which opened for business in 1999, were supposed to be a set

of rules to limit a country's annual deficit to three per cent of gross domestic product, and the totalaccumulated debt to sixty per cent of G.D.P. It was a nice idea, but by 2004 the two biggest

economies in the euro zone, Germany and France, had broken the rules for three years in a row.
http://en.wikipedia.org/wiki/Bulgarian_levhttp://en.wikipedia.org/wiki/Bulgarian_levhttp://en.wikipedia.org/wiki/Danish_kronehttp://en.wikipedia.org/wiki/Danish_kronehttp://en.wikipedia.org/wiki/Danish_kronehttp://en.wikipedia.org/wiki/Lithuanian_litashttp://en.wikipedia.org/wiki/Lithuanian_litashttp://en.wikipedia.org/wiki/Lithuanian_litashttp://en.wikipedia.org/wiki/Latvian_latshttp://en.wikipedia.org/wiki/Latvian_latshttp://en.wikipedia.org/wiki/Latvian_latshttp://en.wikipedia.org/wiki/Optimum_currency_areahttp://en.wikipedia.org/wiki/Optimum_currency_areahttp://en.wikipedia.org/wiki/Optimum_currency_areahttp://en.wikipedia.org/wiki/Robert_Mundellhttp://en.wikipedia.org/wiki/Robert_Mundellhttp://en.wikipedia.org/wiki/Robert_Mundellhttp://en.wikipedia.org/wiki/Optimum_currency_area#OCA_with_stationary_expectationshttp://en.wikipedia.org/wiki/Optimum_currency_area#OCA_with_stationary_expectationshttp://en.wikipedia.org/wiki/Optimum_currency_area#OCA_with_stationary_expectationshttp://en.wikipedia.org/wiki/Optimum_currency_area#OCA_with_international_risk_sharinghttp://en.wikipedia.org/wiki/Optimum_currency_area#OCA_with_international_risk_sharinghttp://en.wikipedia.org/wiki/Optimum_currency_area#OCA_with_international_risk_sharinghttp://en.wikipedia.org/wiki/Late-2000s_recessionhttp://en.wikipedia.org/wiki/Late-2000s_recessionhttp://en.wikipedia.org/wiki/Late-2000s_recessionhttp://en.wikipedia.org/wiki/Greek_government-debt_crisishttp://en.wikipedia.org/wiki/Greek_government-debt_crisishttp://en.wikipedia.org/wiki/Greek_government-debt_crisishttp://en.wikipedia.org/wiki/Jack_Strawhttp://en.wikipedia.org/wiki/Jack_Strawhttp://en.wikipedia.org/wiki/Jack_Strawhttp://en.wikipedia.org/wiki/Euro#cite_note-70http://en.wikipedia.org/wiki/Euro#cite_note-70http://en.wikipedia.org/wiki/Euro#cite_note-70http://en.wikipedia.org/wiki/Euro#cite_note-70http://en.wikipedia.org/wiki/Jack_Strawhttp://en.wikipedia.org/wiki/Greek_government-debt_crisishttp://en.wikipedia.org/wiki/Late-2000s_recessionhttp://en.wikipedia.org/wiki/Optimum_currency_area#OCA_with_international_risk_sharinghttp://en.wikipedia.org/wiki/Optimum_currency_area#OCA_with_stationary_expectationshttp://en.wikipedia.org/wiki/Robert_Mundellhttp://en.wikipedia.org/wiki/Optimum_currency_areahttp://en.wikipedia.org/wiki/Latvian_latshttp://en.wikipedia.org/wiki/Lithuanian_litashttp://en.wikipedia.org/wiki/Danish_kronehttp://en.wikipedia.org/wiki/Bulgarian_lev


18/28

18

Transaction costs and risks

Most traded currencies by valueCurrency distribution of global foreign exchange market turnover

Rank CurrencyISO 4217code

(Symbol)

% daily share

(April 2010)

1 United States dollar USD ($) 84.9%

2 Euro EUR () 39.1%

3 Japanese yen JPY () 19.0%

4 Pound sterling GBP () 12.9%

5 Australian dollar AUD ($) 7.6%

6 Swiss franc CHF (Fr) 6.4%

7 Canadian dollar CAD ($) 5.3%

8 Hong Kong dollar HKD ($) 2.4%

9 Swedish krona SEK (kr) 2.2%

10 New Zealand dollar NZD ($) 1.6%

11 South Korean won KRW () 1.5%
http://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/ISO_4217http://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Japanese_yenhttp://en.wikipedia.org/wiki/Japanese_yenhttp://en.wikipedia.org/wiki/Japanese_yenhttp://en.wikipedia.org/wiki/Pound_sterlinghttp://en.wikipedia.org/wiki/Pound_sterlinghttp://en.wikipedia.org/wiki/Pound_sterlinghttp://en.wikipedia.org/wiki/Australian_dollarhttp://en.wikipedia.org/wiki/Australian_dollarhttp://en.wikipedia.org/wiki/Australian_dollarhttp://en.wikipedia.org/wiki/Swiss_franchttp://en.wikipedia.org/wiki/Swiss_franchttp://en.wikipedia.org/wiki/Swiss_franchttp://en.wikipedia.org/wiki/Canadian_dollarhttp://en.wikipedia.org/wiki/Canadian_dollarhttp://en.wikipedia.org/wiki/Canadian_dollarhttp://en.wikipedia.org/wiki/Hong_Kong_dollarhttp://en.wikipedia.org/wiki/Hong_Kong_dollarhttp://en.wikipedia.org/wiki/Hong_Kong_dollarhttp://en.wikipedia.org/wiki/Swedish_kronahttp://en.wikipedia.org/wiki/Swedish_kronahttp://en.wikipedia.org/wiki/Swedish_kronahttp://en.wikipedia.org/wiki/New_Zealand_dollarhttp://en.wikipedia.org/wiki/New_Zealand_dollarhttp://en.wikipedia.org/wiki/New_Zealand_dollarhttp://en.wikipedia.org/wiki/South_Korean_wonhttp://en.wikipedia.org/wiki/South_Korean_wonhttp://en.wikipedia.org/wiki/South_Korean_wonhttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Switzerlandhttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Switzerlandhttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Switzerlandhttp://en.wikipedia.org/wiki/Australiah

the euro main file

Documents