NationMaster - Encyclopedia: European Union euro

The euro (€; ISO 4217 code EUR) is the currency of twelve European Union member states: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. It is the result of the most significant monetary reform in Europe since the Roman Empire. Though the euro can be seen simply as a mechanism for perfecting the Single European Market, facilitating free trade between the members of the Eurozone, the euro is also a key part of the European project of political integration. ISO 4217 is an international standard describing three letter codes to define the names of currencies established by the International Organization for Standardization or ISO. The first two letters of the code are the two letters of ISO 3166-1 alpha-2 country codes (which are similar to those used... The European Union or EU is an intergovernmental organisation of European countries, which currently has 25 member states. ... The Republic of Austria ( German: Republik Österreich) is a landlocked country in Central Europe. ... The Republic of Ireland ( Irish: Poblacht na hÉireann) is the official description of an independent state which covers approximately five-sixths of the island of Ireland, off the coast of north-west Europe. ... The Italian Republic or Italy ( Italian: Repubblica Italiana or Italia) is a country in southern Europe. ... The Grand Duchy of Luxembourg is a small landlocked state in the north-west of the continental European Union, bordered by France, Germany and Belgium. ... Monetary reform is accounting reform that reaches more deeply into banking central bank, money supply and monetary policy. ... The Roman Empire is not the Holy Roman Empire (843-1806). ... The European Community (EC), most important of three European Communities, was originally founded on March 25, 1957 by the signing of the Treaty of Rome under the name of European Economic Community. ... Free trade is an economic concept referring to the selling of products between countries without tariffs or other trade barriers. ... The Eurozone (also called Euro-area or Euroland) is the subset of European Union member states which have adopted the Euro (€) currency, creating a currency union. ...

The euro is administered by the European System of Central Banks (ESCB), composed of the European Central Bank (ECB) and the Eurozone central banks operating in member states. The ECB (headquartered in Frankfurt am Main, Germany) has sole authority to set monetary policy; the other members of the ESCB participate in the printing, minting and distribution of notes and coins, and the operation of the Eurozone payment system. The European System of Central Banks (ESCB) is composed of the European Central Bank (ECB) and the national central banks (NCBs) of all 25 EU Member States. ... The European Central Bank (ECB) in Frankfurt am Main, Germany is the central bank of the eurozone, in charge of monetary policy for the 12 countries that use the new euro currency. ... The Eurozone (also called Euro-area or Euroland) is the subset of European Union member states which have adopted the Euro (€) currency, creating a currency union. ... A central bank is an entity responsible for monetary policy of its country (or in the case of the EU, group of member countries). ... Frankfurt am Main [ˈfraŋkfʊrt] is the largest city in the German state of Hessen and the fifth largest city of Germany. ... This article or section should include material from Monetary policy of central banks. ... The euro symbol The euro (EUR or €) is the single currency for many countries within the European Union. ... The euro (EUR or €) is the currency of 12 European Union (EU) member states: ( Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain); four European micro-states: ( Andorra, Monaco, San Marino and the Holy See - Vatican City), as well as EU institutions. ...

Characteristics

The euro is divided into 100 cents, but variuous vernacular terms are also used in some countries: in Greece, the name leptó, plural leptá (Λεπτά) is used instead, and in Italy the original word "centesimo", from which "cent" is derived, is used currently. In France, people tend to keep using "centime", the subdivision of their former money (French franc). The form "cent" is officially used in the singular and in the plural in English (see the relevant section below). The euro (EUR or €) is the currency of 12 European Union (EU) member states: ( Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain); four European micro-states: ( Andorra, Monaco, San Marino and the Holy See - Vatican City), as well as EU institutions. ... The euro symbol The euro (EUR or €) is the single currency for many countries within the European Union. ... The letter E is the fifth letter in the Latin alphabet. ... If you were looking for the C, C++, or C# programming languages then see C programming language, C Plus Plus, or C Sharp programming language C is the third letter of the Roman alphabet. ... Graphic symbols are often used as a shorthand for currency names. ... A two cent euro coin In currency, the cent is a monetary unit that equals th of the basic unit of value. ... Though abolished as a legal coin by Louis XIII in 1641 in favor of the gold louis or ecu, the term franc continued to be used in common parlance for the livre. ...

All euro coins have a common side showing the worth and a national side showing an image specifically chosen by the country that issued it; the monarchies often have a picture of their reigning monarch, other countries usually have their national symbols. All the different coins can be used in all the participating member states: for example, a euro coin bearing an image of the Spanish king is legal tender not only in Spain, but also in all the other nations where the euro is in use. There are two-euro, one-euro, fifty-cent, twenty-cent, ten-cent, five-cent, two-cent and one-cent coins, though the latter two are not generally used in Finland or the Netherlands (but are still legal tender). The euro (EUR or €) is the currency of 12 European Union (EU) member states: ( Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain); four European micro-states: ( Andorra, Monaco, San Marino and the Holy See - Vatican City), as well as EU institutions. ... For related meanings see also Monarch (disambiguation) A monarchy, (from the Greek monos, one, and archein, to rule) is a form of government that has a monarch as Head of State. ...

Euro banknotes have a common design for each denomination on both sides. Notes are issued in the following amounts: €500, €200, €100, €50, €20, €10, and €5. Some higher denominations are not issued in some countries, though again, are legal tender. The euro symbol The euro (EUR or €) is the single currency for many countries within the European Union. ...

Transition

The euro was established by the provisions in the 1992 Maastricht Treaty on European Union that was used to establish an economic and monetary union. In order to participate in the new currency, member states had to meet strict criteria such as a budget deficit of less than three per cent of GDP, a debt ratio of less than sixty per cent of GDP, combined with low inflation and interest rates close to the EU average. Maastricht, also spelled Maestricht, or Mestreech in local dialect, is a municipality, and capital of the province of Limburg. ... The Maastricht treaty (formally, the Treaty on European Union) was signed on 7 February 1992 in Maastricht between the members of the European Community and entered into force on 1 November 1993. ... In economics, a monetary union is a situation where several countries have agreed to share a single currency among them. ... A budget deficit occurs when an entity (often a government) spends more money than it takes in. ... In economics, the gross domestic product (GDP) is a measure of the amount of the economic production of a particular territory in financial capital terms during a specific time period. ... Inflation rates of five core members of the G8 from 1950 to 1994. ... In finance, interest has three general definitions. ...

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 in euros of these subdivisions (which represent the exchange rates at which the currency entered the euro) are as follows: In finance, the exchange rate between two currencies specifies how much one currency is worth in terms of the other. ...

The above rates were determined by the Council of the European Union, based on a recommendation from the European Commission based on of the market rates on 31 December 1998, so that one ECU (European Currency Unit) 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.) These rates were set by Council Regulation 2866/98 (EC), of 31 December 1998. They could not be set earlier, because the ECU depended on the closing exchange rate of the non-euro currencies (principally the pound sterling) that day. The Schilling was the currency of Austria until the Euro exchange in 2002. ... The franc is the name of several currency units. ... The guilder (Dutch gulden), represented by the symbol ƒ, was the name of the currency used in the Netherlands from the 15th century until 1999, when it was replaced by the euro (coins and notes were not introduced until 2002). ... The markka or mark was the currency used in Finland from 1861 until January 1, 1999, when it was replaced by the euro (€). The currency code used for the markka was FIM, and the usual familiar notation was a postfix mk. ... The franc is the name of several currency units. ... A 10 Deutsche Mark banknote from Germany 1993 showing Carl Friedrich Gauss (http://www. ... A IR£1 coin, featuring the Irish red deer. ... Lira is the name of the monetary unit of a number of countries, as well as the former currency of Italy, San Marino and the Vatican City. ... The franc is the name of several currency units. ... The escudo was the official currency of Portugal prior to the introduction of the euro in January 1, 1999 (euro coins and notes were not introduced until 2002). ... The peseta (₧) was the currency of Spain (and Andorra, along with the French franc) until December 31, 1998. ... December 31 is the 365th day of the year (366th in leap years) in the Gregorian Calendar. ... The European Currency Unit (₠; ECU) was a basket of the currencies of the European Community member states, used as the unit of account of the European Community, before being replaced by the euro. ... December 31 is the 365th day of the year (366th in leap years) in the Gregorian Calendar. ... The pound sterling, which strictly speaking refers to basic currency unit of sterling, now the pound, can generally refer to the currency of the United Kingdom (UK). ...

Greece failed to meet the criteria for joining initially, so it did not join the common currency on 1 January 1999. It was admitted two years later, on 1 January 2001, at the following exchange rate:

The procedure used to fix the irrevocable conversion rate between the drachma and 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, in Council Regulation 1478/2000 (EC), of 19 June 2000. Drachma, pl. ... June 19 is the 170th day of the year (171st in leap years) in the Gregorian Calendar, with 195 days remaining. ...

The currency was introduced in non-physical form (travellers' cheques, electronic transfers, banking, etc.) at midnight on 1 January 1999, when the national currencies of participating countries (the Eurozone) ceased to exist independently in that their exchange rates were locked at fixed rates against each other, effectively making them mere non-decimal subdivisions of the euro. The euro thus became the successor to the European Currency Unit (ECU). The notes and coins for the old currencies, however, continued to be used as legal tender until new notes and coins were introduced on 1 January 2002. The European Currency Unit (₠; ECU) was a basket of the currencies of the European Community member states, used as the unit of account of the European Community, before being replaced by the euro. ... Legal tender is payment that cannot be refused in settlement of a debt. ...

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 the national currencies ceased to be legal tender varied from member state to member state. The earliest date was in Germany; the mark officially ceased to be legal tender on 31 December 2001, though the exchange period lasted two months. The final date was 28 February 2002, by which all national currencies ceased to be legal tender in their respective member states. (Note that some of these dates were earlier than was originally planned.) However, even after the official date, they continued to be accepted by national central banks for several years, and in some states for several decades hence. The earliest coins to become non-convertible were the Portuguese escudos, which ceased to have monetary value after 31 December 2002, although banknotes do remain exchangeable until 2022. February 28 is the 59th day of the year in the Gregorian Calendar. ... A 10 Deutsche Mark banknote from Germany 1993 showing Carl Friedrich Gauss (http://www. ... December 31 is the 365th day of the year (366th in leap years) in the Gregorian Calendar. ... February 28 is the 59th day of the year in the Gregorian Calendar. ... December 31 is the 365th day of the year (366th in leap years) in the Gregorian Calendar. ... 2022 is the common year starting on Saturday. ...

Although some countries are not printing the €500 and €200 banknotes, all banknotes are legal tender throughout the Eurozone. Finland decided not to mint or circulate one-cent and two-cent coins, except in small numbers for collectors. All cash transactions in Finland ending in one or two cents are rounded down and three or four cents are rounded up. Despite this convention, the one-cent and two-cent coins are still legal tender in Finland.

Participation in the Economic and Monetary Union

The Eurozone (also called Euro-area or Euroland) is the subset of European Union member states which have adopted the Euro (€) currency, creating a currency union. ...

Countries using the euro

At present the member states officially using the euro are Austria, Belgium, Finland, France (except Pacific territories using the CFP franc), Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain. Overseas territories of some Eurozone countries, such as French Guiana, Réunion, Saint-Pierre et Miquelon, and Martinique, also use the euro. These countries together are frequently referred to as the "Eurozone", "Euroland" or more rarely as "Eurogroup". The Republic of Austria ( German: Republik Österreich) is a landlocked country in Central Europe. ... The CFP franc (in French: franc Pacifique or franc CFP ; CFP stood for Colonies françaises du Pacifique (i. ... The Republic of Ireland ( Irish: Poblacht na hÉireann) is the official description of an independent state which covers approximately five-sixths of the island of Ireland, off the coast of north-west Europe. ... The Italian Republic or Italy ( Italian: Repubblica Italiana or Italia) is a country in southern Europe. ... The Grand Duchy of Luxembourg is a small landlocked state in the north-west of the continental European Union, bordered by France, Germany and Belgium. ... French Guiana ( French: Guyane) is an overseas département (département doutre-mer, or DOM) of France, located on the Caribbean coast of South America. ... Réunion is an island, as well as an overseas département (département doutre-mer, or DOM) of France, located in the Indian Ocean, east of Madagascar. ... Saint-Pierre and Miquelon (French Saint-Pierre et Miquelon) is a French overseas collectivity consisting of several small islands off the eastern coast of Canada near Newfoundland. ... The département of Martinique is an overseas département (département doutre-mer, or DOM) of France, located in the Caribbean Sea. ... The Eurozone (also called Euro-area or Euroland) is the subset of European Union member states which have adopted the Euro (€) currency, creating a currency union. ...

Monaco, San Marino, and Vatican City previously used currencies that were replaced by the euro, and now mint their own euro coins by virtue of agreements (http://europa.eu.int/scadplus/leg/en/lvb/l25040.htm) concluded with EU member states (Italy in the case of San Marino and Vatican City, and France in the case of Monaco), on behalf of the European Community. The Principality of Monaco or Monaco ( French: Principauté de Monaco or Monaco; Monegasque: Munegu or Principatu de Munegu) is a city state and the second-smallest country in the world, wedged in between the Mediterranean Sea and France along the French Riviera or Côte dAzur (The Blue Coast). ... San Marino (disambiguation). ... The State of the Vatican City ( Latin: Status Civitatis Vaticanæ), is a landlocked enclave surrounded by the city of Rome in Italy, and the smallest independent state in the world (both in area and in population). ... The Italian Republic or Italy ( Italian: Repubblica Italiana or Italia) is a country in southern Europe. ... The Principality of Monaco or Monaco ( French: Principauté de Monaco or Monaco; Monegasque: Munegu or Principatu de Munegu) is a city state and the second-smallest country in the world, wedged in between the Mediterranean Sea and France along the French Riviera or Côte dAzur (The Blue Coast). ... The European Community (EC), most important of three European Communities, was originally founded on March 25, 1957 by the signing of the Treaty of Rome under the name of European Economic Community. ...

Andorra, Montenegro, and Kosovo also used currencies that were replaced by the euro (the French franc and Spanish peseta in the case of Andorra, and the German mark in the case of Montenegro and Kosovo). They have now adopted the euro as their de facto currencies, without having entered into any legal arrangements with the EU that explicitly permit them to do so. In October 2004, Andorra began negotiating a monetary agreement with the European Union that would allow the country to issue euro coins as Monaco, San Marino, and the Vatican City do. National motto: Virtus Unita Fortior (Latin: Virtue united is stronger) Official language: Catalan. ... This article is about the republic in Serbia-Montenegro, Europe. ... Kosovo (disambiguation). ... The franc is the name of several currency units. ... The peseta (₧) was the currency of Spain (and Andorra, along with the French franc) until December 31, 1998. ... A 10 Deutsche Mark banknote from Germany 1993 showing Carl Friedrich Gauss (http://www. ...

Many of the foreign currencies that were pegged to European currencies are now pegged to the euro. For example, the escudo of Cape Verde used to be pegged to the Portuguese escudo, but is now pegged to the euro. Bosnia-Herzogovina uses a convertible mark which was pegged to the Deutsche mark but is now pegged to the euro. Similarly the CFP franc, CFA franc and Comoros franc, all once pegged to the French franc, are now pegged to the euro. The euro is widely accepted in Cape Verde already on an informal basis, and in November 2004, during a meeting in Portugal, the prime minister of Cape Verde considered formally adopting the euro as his country's currency. The escudo was the official currency of Portugal prior to the introduction of the euro in January 1, 1999 (euro coins and notes were not introduced until 2002). ... Cape Verde ( Portuguese: Cabo Verde) is a republic located on an archipelago of the North Atlantic Ocean, off the western coast of Africa. ... The CFP franc (in French: franc Pacifique or franc CFP ; CFP stood for Colonies françaises du Pacifique (i. ... The countries using the CFA franc The CFA franc (in French: franc CFA, or just franc in everyday conversation if no ambiguity is possible) is a currency used in 12 formerly French-ruled African countries, as well as in Guinea-Bissau (former Portuguese colony) and in Equatorial Guinea (former Spanish... The Union of Comoros (until 2002 the Islamic Federal Republic of the Comoros) is principally a three- island country in southern Africa, situated at the northern end of the Mozambique Channel in the Indian Ocean, between northern Madagascar and northern Mozambique. ... The franc is the name of several currency units. ... The franc is the name of several currency units. ...

EU-members outside the Eurozone

The ten newest European Union members should eventually use the euro, as eventual adoption of the euro was part of their accession agreements. Cyprus, Estonia, Latvia, Lithuania, Malta and Slovenia have already joined Denmark in the European Exchange Rate Mechanism, ERM II. The dates these ten states hope to complete the third stage of the EMU vary: 1 January 2007 for Estonia, Slovenia and Lithuania 1 (http://www.lb.lt/news/pg.dll?lng=EN&did=1014)(since they are already part of ERM II); 2007 for Cyprus; 2008 for Latvia, Malta and Slovakia; 2009 for the Czech Republic and Poland; and finally 2010 for Hungary. Estonia finalised the design for the country's coins' reverse side in late 2004. 1 (http://www.eestipank.info/pub/en/majandus/euroopaliit/euro/kavand/_1kava.html) 2 (http://www.eestipank.info/pub/en/yldine/press/pressiteated/pt2004/_20041215.html) Cyprus (in Greek Kypros Κύπρος and in Turkish Kıbrıs) is an island in the eastern Mediterranean Sea, 113 kilometres (70 miles) south of Turkey and around 120 km west of the Syrian coast. ... Estonia (disambiguation). ... The Republic of Latvia ( Latvian: Latvijas Republika), or Latvia ( Latvian: Latvija), is a country in Northern Europe. ... The Republic of Lithuania (in Lithuanian, Lietuva) is a republic in Northeastern Europe. ... This article is about the European nation. ... The Republic of Slovenia ( Slovenian: Republika Slovenija) is a coastal sub-Alpine country in south central Europe bordering Italy to the west, the Adriatic Sea to the southwest, Croatia to the south and east, Hungary to the northeast, and Austria to the north. ... Denmark (disambiguation). ... The European exchange rate mechanism (or ERM) was a system introduced by the European Community in March 1979, as part of the European Monetary System (EMS), to reduce exchange-rate variability and achieve monetary stability in Europe, in preparation for Economic and Monetary Union and the introduction of a single... 2007 is a common year starting on Monday of the Gregorian calendar. ... Estonia (disambiguation). ... The Republic of Slovenia ( Slovenian: Republika Slovenija) is a coastal sub-Alpine country in south central Europe bordering Italy to the west, the Adriatic Sea to the southwest, Croatia to the south and east, Hungary to the northeast, and Austria to the north. ... The Republic of Lithuania (in Lithuanian, Lietuva) is a republic in Northeastern Europe. ... The European exchange rate mechanism (or ERM) was a system introduced by the European Community in March 1979, as part of the European Monetary System (EMS), to reduce exchange-rate variability and achieve monetary stability in Europe, in preparation for Economic and Monetary Union and the introduction of a single... 2007 is a common year starting on Monday of the Gregorian calendar. ... Cyprus (in Greek Kypros Κύπρος and in Turkish Kıbrıs) is an island in the eastern Mediterranean Sea, 113 kilometres (70 miles) south of Turkey and around 120 km west of the Syrian coast. ... 2008 is a leap year starting on Tuesday of the Gregorian calendar. ... The Republic of Latvia ( Latvian: Latvijas Republika), or Latvia ( Latvian: Latvija), is a country in Northern Europe. ... This article is about the European nation. ... National motto: None Official language Slovak Capital Bratislava President Ivan Gašparovič Prime Minister Mikuláš Dzurinda Area - Total - % water Ranked 126th 49,035 km² Negligible Population - Total ( 2004) - Density Ranked 103rd 5,379,455 109/km² Independence January 1, 1993 (division of Czechoslovakia) Currency Slovak koruna Time zone - in summer CET... 2009 is a common year starting on Thursday of the Gregorian calendar. ... National motto: Truth prevails ( Czech: Pravda vítězí) Official language Czech Capital Praha ( Prague) President Václav Klaus Prime Minister Stanislav Gross Area - Total - % water Ranked 114th 78,866 km² 2% Population - Total ( 2003) - Density Ranked 76th 10. ... The Republic of Poland, a democratic country with a population of 38,626,349 and area of 312,685 km², is located in Central Europe, between Germany to the west, the Czech Republic and Slovakia to the south, Ukraine and Belarus to the east, and the Baltic Sea, Lithuania and... 2010 is a common year starting on Friday of the Gregorian calendar. ... The Republic of Hungary (Magyar Köztársaság) or Hungary (Magyarország) is a landlocked country in Central Europe, bordered by Austria, Slovakia, Ukraine, Romania, Serbia, Croatia and Slovenia. ...

The United Kingdom and Sweden have no plans at present to adopt the euro—however Sweden (unlike the UK and Denmark) does not have a formal opt-out from the monetary union (the third stage of EMU) and therefore must (in theory at least) convert to the euro at some point. Notwithstanding this, on 14 September 2003, a Swedish referendum was held on the euro, the result of which was a rejection of the common currency. The Swedish government has argued that such a line of action is possible since one of the requirements for Eurozone membership is a prior two-year membership of the ERM II. By simply choosing to stay outside the exchange rate mechanism, the Swedish government is provided a formal loophole avoiding the theoretical requirement of adopting the euro. Sweden's major parties continue to believe that it would be in the national interest to join. September 14 is the 257th day of the year (258th in leap years). ... Since the introduction of parliamentarism in Sweden six referendums have been held. ...

UK Eurosceptics believe that the single currency is merely a stepping stone to the formation of a unified European superstate. The contrary view is that, since intra-European exports make up 60% of the UK's total, it eases the Single Market by removing currency risk. An interesting parallel can be seen in the 19th century discussions concerning the possibility of the UK joining the Latin Monetary Union [1] (http://www.oup.co.uk/pdf/0-19-924366-2.pdf). The UK government has set five economic tests that must be passed before it can recommend that the UK join the euro. It assessed these tests in October 1997 and June 2003, and decided on both occasions that they had not all been passed. All three main political parties in the UK have promised to hold a referendum before joining the euro, and opinion polls consistently report a majority of the public to be opposed to doing so. Euroscepticism is scepticism about, or disagreement with, the purposes of the European Union, sometimes coupled with a desire to preserve national sovereignty. ... Alternative meaning: Nineteenth Century (periodical) (18th century — 19th century — 20th century — more centuries) As a means of recording the passage of time, the 19th century was that century which lasted from 1801-1900 in the sense of the Gregorian calendar. ... The Latin Monetary Union was a 19th century attempt to unify several European currencies into a single currency that could be used in all the member states, at a time when most national currencies were still made out of gold and silver. ... The five key tests for the UK to Join the Euro The economic tests specified by the current UK Labour government that must be satisfied before a decision on entry to the Euro can be made. ...

Denmark negotiated a number of opt-out clauses from the Maastricht treaty after it had been rejected in a first referendum (namely, Denmark attained an opt-out from joint defence, common currency, judicial cooperation, and European citizenship). The modified treaty was then accepted in another referendum one year after the first one. In 2000, another referendum was held in Denmark regarding the euro; once more, the population decided to stay outside the eurozone for now. However, Danish politicians have suggested that debate on abolishing the four opt-out clauses may be re-opened in late 2005 or early 2006. In addition, Denmark has pegged its krone to the euro (€1 = DKr7.43), something which Sweden has not done. Denmark (disambiguation). ... The Maastricht treaty (formally, the Treaty on European Union) was signed on 7 February 1992 in Maastricht between the members of the European Community and entered into force on 1 November 1993. ... The Eurozone (also called Euro-area or Euroland) is the subset of European Union member states which have adopted the Euro (€) currency, creating a currency union. ... Krone can mean: Krone - the former currency of the Austro-Hungarian Empire from 1892. ...

Bulgaria and Romania

Although Bulgaria is not a member state yet (member as of January 1, 2007), the Bulgarian National Bank (BNB) and the Bulgarian government have agreed on the introduction of the euro in mid 2009, when the Bulgarian National Bank is expected to become part of the EMU and will receive the right to issue Bulgarian euro coins. The early accession to the EMU is due to the extremely tight monetary policy currently in use, which is the result of Bulgaria's agreement with the Monetary Board. In 1999 the Bulgarian currency was re-denominated (1 New Lev = 1000 Old Levs) and the value of the lev was fixed to one German Mark, therefore its value has since been fixed in relation to the euro. Even at this point of time Bulgaria has fulfilled the great majority of the EMU membership criteria. The Republic of Bulgaria is a republic in the southeast of Europe. ... 2007 is a common year starting on Monday of the Gregorian calendar. ... central bank of the Republic of Bulgaria and one of the oldest central banks in the world, established on 25 January 1879. ... 2009 is a common year starting on Thursday of the Gregorian calendar. ... central bank of the Republic of Bulgaria and one of the oldest central banks in the world, established on 25 January 1879. ... 2003 Bulgaria 100 levs bill. ... The Republic of Bulgaria is a republic in the southeast of Europe. ...

As for Romania (member as of January 1, 2007), it is likely to join the Eurozone in the 2012-2013 period. However, there is no clear strategy of the Romanian government at this point, so the actual date depends on the future development in the Romanian fiscal and monetary policies. Romania (formerly spelled Rumania or Roumania; Romanian: România) is a country in southeastern Europe. ... 2007 is a common year starting on Monday of the Gregorian calendar. ...

Effects of a single currency

Having a single currency is expected to increase the economic interdependency of and the ease of trade between the EU members that have adopted the euro. This, in theory, should be beneficial for citizens of the euro area, as increases in trade are historically one of the main driving forces of economic growth. Moreover, this would fit with the long-term purpose of a unified market within the European Union. A unified market is the economic term for a single market where goods, services, capital and people can move freely without regard to national boundaries. ... The European Union or EU is an intergovernmental organisation of European countries, which currently has 25 member states. ...

A major benefit is the removal of bank currency transaction charges that previously was a significant cost to both individuals and businesses when changing from one currency to another. Conversely, banks will suffer a significant reduction in profits with the loss of this income. The essential function of a bank is to provide services related to the storing of value and the extending of credit. ... Historically, the term business referred to activities or interests. ...

A second effect of the common European currency is that differences in prices—in particular in price levels—will decrease. Differences in prices can trigger arbitrage, e.g. trade between countries, which will equalise prices across the euro area. Often this will also result in increased competition between companies, which should help to contain inflation and which therefore will be beneficial to consumers. In economics, arbitrage is the practice of taking advantage of a state of imbalance between two (or possibly more) markets: a combination of matching deals are struck that exploit the imbalance, the profit being the difference between the market prices. ...

Some economists are concerned about the possible dangers of adopting a single currency for a large and diverse area. Because the Eurozone has a single monetary policy (and so a single interest rate), set by the ECB, it cannot be fine-tuned for the economic situation in each individual country. Public investment and fiscal policy in each country is thus the only way in which economic changes can be introduced specific to each region or nation. Eurozone members are experiencing large variations in inflation and unemployment, though not yet great enough to cause significant economic damage. Structural considerations taken into account, it will be much easier to public investment fits into fiscal policy. ... Fiscal Policy is the economic term which describes the behaviour of governments in raising money to fund current spending and investment for collective social purposes and for transfer payments to citizens and residents of the territory for which the government is responsible. ...

Others point out that the Eurozone is similar in size and population to the United States, which has a single currency and a single monetary policy set by the Federal Reserve. However, the individual states that make up the USA have less regional autonomy and a more homogeneous economy than the nations of the EU. Of particular concern is the notion that the economies of the EU may not all be 'in sync'—each may be at a different stage in the boom and bust cycle, or just be experiencing different inflationary pressures. Labour mobility is also higher in the United States than across the Eurozone. The Federal Reserve System is headquartered in the Eccles Building on Constitution Avenue in Washington, DC. The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central bank of the United States. ... Regional autonomy is the term for the de-centralisation of governance to outlying regions. ... In economics, the term boom and bust refers to the movement of an economy through economic cycles due to changes in aggregate demand. ...

It can also be argued that the single currency works for the USA because the US dollar is a hegemonic currency. Before the euro, eighty per cent of the world's currency reserves were held in US dollars. This gives the US economy a huge subsidy in that reserve dollars are invested in US institutions or foreign institutions under US control. This subsidy helps cushion the effects of a possible strong dollar hurting certain regions of the USA. The United States dollar is the official currency of the United States. ...

If the euro were to become either a hegemonic currency replacing the dollar or a co-hegemonic currency equal in reserve status to the dollar, some of the subsidy the USA gains would be transferred to the EU and help balance out some of the problems of the present heterogeneous economic structure still in place.

It has been said that the euro would add great liquidity to the financial markets in Europe. Governments and companies can now borrow money in euros instead of their local currency, and this would allow access to many more sources of funds. Other economists consider that the potential strength of the Eurozone would be in the coherent efforts of a virtual greater super-economy, in which it is now potentially easier to create stronger financial associations, rather than in the mere sum of single liquidities. Market liquidity is a business or economics term that refers to the ability to quickly buy or sell a particular item without causing a significant movement in the price. ...

The euro and oil

A final and possibly decisive effect is on the pricing of oil. The Eurozone consumes more imported oil than the United States. This would mean that more euros than US dollars would flow into the OPEC nations, except that oil is priced by those nations in US dollars only. There have been frequent discussions at OPEC about pricing oil in euros, which would have various effects, among them, requiring nations to hold stores of euros to buy oil, rather than the US dollars that they hold now. Venezuela under Hugo Chávez has been a vocal proponent of this scheme, despite selling most of its own oil to the United States. If implemented, this would be a transfer of a 'float' that presently subsidises the United States to subsidise the European Union instead. Another effect would be that the price of oil in the Eurozone would more closely follow the world price. When oil prices skyrocketed to almost 50 US dollars in August 2004, the oil price in euros didn't change nearly as much because of the concurrent rise in the exchange rate of the euro to the US dollar (to an exchange rate of EUR 1.00 = USD 1.33 in December 2004). Similarly, should oil prices lower significantly, together with the USD/EUR exchange rate, the oil price in the Eurozone would not fall as much. On the other hand, if the exchange rate and the oil price move in different directions, oil price changes are magnified. Pricing oil in euros would nullify this dependency of European oil prices on the USD/EUR exchange rate. Oil is a generic term for organic liquids that are not miscible with water. ... The Organization of the Petroleum Exporting Countries (OPEC) is made up of Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela; since 1965, its international headquarters have been in Vienna, Austria. ... The Bolivarian Republic of Venezuela (Spanish: República Bolivariana de Venezuela)1 is a country in northern South America. ... President Hugo Chávez Hugo Rafael Chávez Frías (born July 28, 1954) is the President of Venezuela. ... August is the eighth month of the year in the Gregorian Calendar and one of seven Gregorian months with the length of 31 days. ... In finance, the exchange rate between two currencies specifies how much one currency is worth in terms of the other. ...

The deficit structure of the US economy relies heavily on the dollar's hegemonic reserve status as a means of securing US debts and deficits. Without this status, the dollar and the US economy might experience what many Latin American countries experienced during the 1980s. As long as the US dollar was not threatened, the US economy was in no danger of collapse. The individual European currencies offered no threat to the dollar's hegemonic position. In the opinion of some economists the euro may pose a threat to US dollar hegemony, and could under certain circumstances result in a US economic collapse. Latin America consists of the countries of South America and some of North America (including Central America and some the islands of the Caribbean) whose inhabitants mostly speak Romance languages, although Native American languages are also spoken. ...

Euro exchange rate

Against the US Dollar

After the introduction of the euro, its exchange rate against other currencies, especially the US dollar, declined heavily. At its introduction in 1999, the euro was worth USD $1.18; by late 2000 it had fallen to below $0.85. It then began what at the time was thought to be a recovery; by the beginning of 2001 it had risen to $0.95. It declined again, finally reaching a low of below $0.84 in July 2001. The currency then began to recover against the U.S. dollar. In the wake of U.S. corporate scandals, the two currencies reached parity on 15 July 2002, and by the end of 2002 the euro had reached $1.04 as it climbed further. The United States dollar is the official currency of the United States. ... July 15 is the 196th day (197th in leap years) of the year in the Gregorian Calendar, with 169 days remaining. ...

On 23 May 2003, the euro surpassed its initial trading value for the first time as it again hit $1.18, and broke the $1.35 barrier (€0.74 = $1) on 24 December 2004. On 30 December 2004 it reached a peak of $1.3668. Some analysts expect the euro to continue to strengthen against the dollar, possibly even to as much as $1.60 by the end of 2005. May 23 is the 143rd day of the year in the Gregorian calendar (144th in leap years). ... December 24 is the 358th day of the year in the Gregorian Calendar (359th in leap years). ... December 30 is the 364th day of the year (365th in leap years) in the Gregorian Calendar, with 1 day remaining. ...

Drivers

Part of the euro's strength is thought to be due to more attractive interest rates in Europe than in the United States. The US Federal Reserve has maintained lower rates than the ECB for some years, despite key European economies, notably Germany, growing relatively slowly or not at all. This is attributed in part to the ECB's duty to check inflation across the Eurozone, which in high-performing countries such as Republic of Ireland is above the ECB's target. In finance, interest has three general definitions. ... The Federal Reserve System is headquartered in the Eccles Building on Constitution Avenue in Washington, DC. The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central bank of the United States. ... The Republic of Ireland ( Irish: Poblacht na hÉireann) is the official description of an independent state which covers approximately five-sixths of the island of Ireland, off the coast of north-west Europe. ...

However, although the interest rate differential forms part of the backdrop, the main reason for the euro's continuing ascent against the dollar is the concern over the huge unsustainable US current account deficits. The market has been awash with concerns about the US twin deficits, which have been a key driver of dollar weakness. The US budget deficit is about $427 billion, or 3.7% of gross domestic product (GDP), while the current account—the broadest trade measure since it adds investment flows—hit a record $166.18bn shortfall in the second quarter of 2004. The term current account usually refers to the current account of the balance of payments (BOP) and contains the import and export items of goods and services. ... A budget deficit occurs when an entity (often a government) spends more money than it takes in. ... A budget deficit occurs when an entity (often a government) spends more money than it takes in. ... The word billion, and its equivalents in other languages, refer to one of two different numbers. ... In economics, the gross domestic product (GDP) is a measure of the amount of the economic production of a particular territory in financial capital terms during a specific time period. ...

A key factor is that a number of Asian currencies are rising less against the dollar than the euro is. In the case of China, the renminbi is pegged against the dollar, whilst the Japanese yen is supported by intervention (and the threat of it) by the Bank of Japan. This means much of the pressure from a falling dollar is translated into a rising euro. The renminbi (Traditional Chinese: 人民幣, Simplified Chinese: 人民币, literally means peoples currency) is the official currency of the Peoples Republic of China. ... A 1,000 yen note, featuring the portrait of Natsume Soseki. ... The Bank of Japan has its headquarters in this building in Tokyo. ...

The euro's climb from its lows began shortly after it was introduced as a cash currency. In the time between 1999 and 2002, eurosceptics tried to imply the weak euro was a sign that the euro experiment was doomed to fail. But it can also be said that its weakness in this period was due to low confidence in a currency that did not exist in "real" form. Once the euro became "real" in the sense of existing in the form of cash, the confidence in the euro rose and the increasing perception that it was here to stay helped increase its value. This effect was probably significant in the euro's decline and recovery between 1999 and 2002, but other factors are more significant since then. Euroscepticism is scepticism about, or disagreement with, the purposes of the European Union, sometimes coupled with a desire to preserve national sovereignty. ...

Consequences

Despite the euro's rise in value, as well as the value of other major and minor currencies, the US trade deficits continue to rise. Economic theory would suggest that a fall in the dollar and a rise in the euro should lead to an improvement in US exports and a decline in US imports, as the former becomes cheaper and the latter more expensive. However, this depends to some extent on how currency costs are passed down the supply chain. Furthermore, the declining dollar makes foreign investment in the US cheaper (although also reducing the return), so that continuing foreign investment may underpin the dollar to some extent.

The role of the dollar as the world's de facto reserve currency helps support both the dollar and the US budget deficit - but it depends on the continued willingness of foreigners to finance both. Central banks and others finance the budget by acquiring newly-issued, dollar-denominated US government bonds, which they need to acquire dollars for. If at some point foreigners become unwilling to accept new bonds at the prevailing interest rate (perhaps because the falling dollar is reducing the bonds' value too much), the dollar will fall even more - or the US will have to raise interest rates, which would reduce economic growth. De facto is a Latin expression that means in fact or in practice. It is commonly used as opposed to de jure (meaning by law) when referring to matters of law or governance or technique (such as standards), that are found in the common experience as created or developed without...

There is speculation that the strength of the euro relative to the dollar might encourage the use of the euro as an alternative reserve currency; Saddam Hussein's Iraq switched its currency reserves from dollars to euros in 2000. Moves by central banks with major reserve currency holdings such as those of India or China to switch some of their reserves from dollars to euros, or even of OPEC countries to switch the currency they trade in from dollars to euros, will further reinforce the dollar's decline. In 2004, the Bank for International Settlements reported the proportion of bank deposits held in euros rising to 20%, from 12% in 2001, and it is continuously rising. The falling dollar also raises returns for US investors from investing in foreign stocks, encouraging a switch which further depresses the dollar. [2] (http://news.yahoo.com/news?tmpl=story&u=/latimests/20041220/ts_latimes/shifttoforeignstockssappingthedollar) A reserve currency is a currency which is held in significant quantities by other governments and institutions as part of their foreign exchange reserves. ... Saddam Hussein Saddām Hussein ʻAbd al-Majid al-Tikrītī (Often spelt Husayn or Hussain; Arabic صدام حسين عبدالمجيد التكريتي; born April 28, 1937 1) was President of Iraq from 1979 to 2003. ... The Republic of Iraq is a Middle Eastern country in southwestern Asia encompassing the ancient region of Mesopotamia. ... The Great Wall of China, stretching over 6,700 km, was erected beginning in the 3rd century BC to guard the north from raids by men on horses. ... The Organization of the Petroleum Exporting Countries (OPEC) is made up of Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela; since 1965, its international headquarters have been in Vienna, Austria. ... The Bank for International Settlements (BIS) is a financial international organization established under the Hague agreements of 1930. ...

The rise in the euro should dampen Eurozone exports, but there is little sign of this happening yet. The main reason is that the currencies of Euroland's major world-wide customers are also seeing their currencies rise relative to the dollar. As the current account deficits continue to rise and the US plans no austerity measures to curb foreign imports and increase exports, the situation may cause the US dollar to lose its position as a hegemonic currency replaced by either the euro or the euro and a basket of currencies.

Plural formation and grammar

Several linguistic issues have arisen in relation to the spelling of the words euro and cent in the many languages of the member states of the European Union, as well as in relation to grammar and the formation of plurals. Immutable word formations have been encouraged by the European Commission in usage with official EU legislation (originally in order to ensure uniform presentation on the banknotes), but the "unofficial" practice concerning the mutability (or not) of the words differs between the member states. Several linguistic issues have resulted from the inclusion of the new word euro into the vocabularies of the languages of the member states of the European Union. ...

The (misnomer) "euro-cent" is sometimes used in countries (such as USA, Canada, Australia) that also have "cent" as a subcurrency, to distinguish them from the local coin. The terms "eurodollar", which commonly refers to US dollar deposits in European banks, or the non-existent "euro dollar" have occasionally been used incorrectly to refer to the euro by sources in other parts of the world, particularly the United States. Eurodollar may refer to: Eurodollars: deposits denominated in United States dollar at banks outside the United States. ...

The euro sign

The international three-letter code (according to ISO standard ISO 4217) for the euro is EUR. A special euro currency sign (€) was also designed. After a public survey had narrowed the original ten proposals down to just two, it was then up to the European Commission to choose the final design. The eventual winner had been designed by Arthur Eisenmenger and was inspired by the Greek letter epsilon (ε), as well as being a stylised version of the letter "E". Logo of the International Organization for Standardization The International Organization for Standardization (ISO or Iso) is an international standard-setting body made up of representatives from national standards bodies. ... ISO 4217 is an international standard describing three letter codes to define the names of currencies established by the International Organization for Standardization or ISO. The first two letters of the code are the two letters of ISO 3166-1 alpha-2 country codes (which are similar to those used... Technical note: Due to technical limitations, some web browsers may not display some special characters in this article. ...

The euro is represented in the Unicode character set with the character name EURO SIGN and the code position U+20AC (decimal 8364) as well as in updated versions of the traditional Latin character sets. Western nations should switch from ISO 8859-1 (Latin 1) to ISO 8859-15 (Latin 9) or Unicode in order to represent this character. ISO 8859-16 represents this character also. In HTML "€" can also be used. The HTML masking was only introduced with HTML 4.0; shortly after the introduction of the euro, many browsers were unable to render it. In computing, Unicode is the international standard whose goal is to provide the means to encode the text of every document people want to store in computers. ... A character encoding is a code that pairs a set of characters (such as an alphabet or syllabary) with a set of something else, such as numbers or electrical pulses. ... ISO 8859-1, more formally cited as ISO/IEC 8859-1 or less formally as Latin-1, is part 1 of ISO/IEC 8859, a standard character encoding defined by ISO. It encodes what it refers to as Latin alphabet no. ... ISO 8859-15, also known as Latin-9, and unofficially as Latin-0 but not as Latin-15, is part 15 of ISO 8859, a standard character encoding defined by ISO. It encodes characters as 8 bits and can be used to represent the alphabet and other important characters for... In computing, Unicode is the international standard whose goal is to provide the means to encode the text of every document people want to store in computers. ... ISO 8859-16, also known as Latin-10 or South-Eastern European, is an 8-bit character encoding, part of the ISO 8859 standard. ... In computing, HyperText Markup Language (HTML) is a markup language designed for the creation of web pages and other information viewable in a browser. ...

The European Commission originally specified the euro sign to have exact proportions, not varying from font to font. By this specification, the euro sign would have effectively been a logo, unlike designable characters such as the letters or other currency signs like the dollar and pound signs. Keeping it to exact measurements would have made it rather broad in comparison to other symbols and digits in most fonts and would sometimes have resulted in layout problems. For these reasons, most type designers have ignored the commission and designed their own variants for each font instead, often based upon the capital letter C in the respective font. The illustration at the top of this article is of the official, invariant euro sign. Arial is a typeface in widespread use because the computer font is packaged with several Microsoft Corporation applications. ... Times New Roman is a serif typeface, developed for The Times newspaper in the early 1930s, designed by Starling Burgess, Victor Lardent and Stanley Morison and produced by the Monotype Corporation. ... Comic Sans is a digital typeface from Microsoft Corporation designed to imitate comic book lettering, for use in casual and informal settings. ... Lucida is a family of typefaces designed by Charles Bigelow and Kris Holmes. ... Verdana is a sans-serif typeface designed by Matthew Carter for Microsoft Corporation, with hand-hinting done by Agfa Monotype’s Tom Rickner. ... In typography, a typeface is a co-ordinated set of character designs, which usually comprises an alphabet of letters, a set of numerals and a set of punctuation marks. ...

On many computer keyboards, the euro sign often appears as secondary function to the letter E, which can be reached by the Alt or Alt Gr key (Ctrl+Alt on US PC keyboards). On modern Irish and British keyboards (where that position was already in use for é), the euro sign appears as a secondary function to the digit 4 (digit 2 on Macintosh keyboards). Some mobile phone companies did an interim software update on their special SMS character set, replacing the rarely used symbol for the Japanese yen with the euro sign: modern phones have both currency signs. Depending on context, the initials SMS may have several meanings: Short message service – text messaging on mobile phones / cell phones Sega Master System – an 8-bit video game console from the 1980s, competing with the Famicom and the NES Seiner Majestät Schiff – His Majestys Ship in the German Kaiserliche... A 1,000 yen note, featuring the portrait of Natsume Soseki. ...

No "official" recommendation is made with regard to the use of a cent sign, and sums are often expressed as fractions of the euro (for example €0.05 rather than 5¢ or 5c). The small letter c is often used (as it was for the guilder subdivision cent). In Ireland, the small letter c is often seen (for instance on postage stamps) but in shops the cent sign ¢ makes an appearance from time to time. In Greece, the capital letter lambda (Λ) is widely used, as an abbreviation for lepta (Λεπτά) and indeed the latter is written on the national side of the Greek-issue coins. In Germany, the abbreviation "ct" is widely used for "cent". A two cent euro coin In currency, the cent is a monetary unit that equals th of the basic unit of value. ... The guilder (Dutch gulden), represented by the symbol ƒ, was the name of the currency used in the Netherlands from the 15th century until 1999, when it was replaced by the euro (coins and notes were not introduced until 2002). ...

Placement of the symbol is also an example of diversity. While the official recommendation is to place it before the number, people in many countries have kept the placement of their former currencies. This is the case of Spain and France, where people are reluctant to change to a system they find a bit ilogical (writing the currency before "€2" but reading it after "two euros").

Economists who helped realise the euro

Economist Robert Mundell is sometimes referred to as the father of the euro. Robert Alexander Mundell (born October 24, 1932) is a Canadian economist who graduated from the University of British Columbia in Vancouver. ...

Slang words

The markka or mark was the currency used in Finland from 1861 until January 1, 1999, when it was replaced by the euro (€). The currency code used for the markka was FIM, and the usual familiar notation was a postfix mk. ... A IR£1 coin, featuring the Irish red deer. ...

Characteristics

Transition

Participation in the Economic and Monetary Union

Countries using the euro

EU-members outside the Eurozone

Bulgaria and Romania

Effects of a single currency

The euro and oil

Euro exchange rate

Against the US Dollar

Drivers

Consequences

Plural formation and grammar

The euro sign

Economists who helped realise the euro

Slang words

See also

External links

Articles

Books

Characteristics GA_googleFillSlot("encyclopedia_square");

Transition

Participation in the Economic and Monetary Union

Countries using the euro

EU-members outside the Eurozone

Bulgaria and Romania

Effects of a single currency

The euro and oil

Euro exchange rate

Against the US Dollar

Drivers

Consequences

Plural formation and grammar

The euro sign

Economists who helped realise the euro

Slang words

See also

External links

Articles

Books

Characteristics