Several studies failed to find any evidence of convergence following the introduction of the euro after a phase of convergence in the early 1990s.
The Eurosystem participates in the printing, minting and distribution of notes and coins in all member states, and the operation of the eurozone payment systems. The 1992 Maastricht Treaty obliges most EU member states to adopt the euro upon meeting certain monetary and budgetary convergence criteria, although not all states have done so.
Placement of the currency sign relative to the numeric amount varies from state to state, but for texts in English the symbol (or the ISO-standard "EUR") should precede the amount. ==History== ===Introduction=== The euro was established by the provisions in the 1992 Maastricht Treaty.
All nations that have joined the EU since 1993 have pledged to adopt the euro in due course.
Additionally, over 200 million people worldwide use currencies pegged to the euro. The euro is the second-largest reserve currency as well as the second-most traded currency in the world after the United States dollar. , with more than €1.3 trillion in circulation, the euro has one of the highest combined values of banknotes and coins in circulation in the world. The name euro was officially adopted on 16 December 1995 in Madrid.
Denmark has negotiated exemptions, while Sweden (which joined the EU in 1995, after the Maastricht Treaty was signed) turned down the euro in a non-binding referendum in 2003, and has circumvented the obligation to adopt the euro by not meeting the monetary and budgetary requirements.
(For macroeconomic theory, see below.) The name "euro" was officially adopted in Madrid on 16 December 1995.
Belgian Esperantist Germain 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. 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 the exchange rates at 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.
Together this direct usage of the euro outside the EU affects nearly 3 million people. The euro has been used as a trading currency in Cuba since 1998, Syria since 2006, and Venezuela since 2018.
A study found that the introduction of the euro accounts for 22% of the investment rate after 1998 in countries that previously had a weak currency. ====Inflation==== The introduction of the euro has led to extensive discussion about its possible effect on inflation.
Statements about this goal were for instance made by Wim Duisenberg, European Central Bank Governor, in 1998, Laurent Fabius, French Finance Minister, in 2000, and Romano Prodi, President of the European Commission, in 2002.
The euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit (ECU) at a ratio of 1:1 (US$1.1743).
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 eurozone) ceased to exist independently.
The share of the euro as a reserve currency increased from 18% in 1999 to 27% in 2008.
After its introduction on 4 January 1999 its exchange rate against the other major currencies fell reaching its lowest exchange rates in 2000 (3 May vs Pound sterling, 25 October vs the U.S.
While the euro dropped subsequently to US$0.83 within two years (26 October 2000), it has traded above the U.S.
After its introduction on 4 January 1999 its exchange rate against the other major currencies fell reaching its lowest exchange rates in 2000 (3 May vs Pound sterling, 25 October vs the U.S.
Statements about this goal were for instance made by Wim Duisenberg, European Central Bank Governor, in 1998, Laurent Fabius, French Finance Minister, in 2000, and Romano Prodi, President of the European Commission, in 2002.
The earliest date was in Germany, where the mark officially ceased to be legal tender on 31 December 2001, though the exchange period lasted for two months more.
Physical euro coins and banknotes entered into circulation on 1 January 2002, making it the day-to-day operating currency of its original members, and by March 2002 it had completely replaced the former currencies.
dollar since the end of 2002, peaking at US$1.60 on 18 July 2008 and since then returning near to its original issue rate.
The Maastricht Treaty was later amended by the Treaty of Nice, which closed the gaps and loopholes in the Maastricht and Rome Treaties. ==Issuing modalities for banknotes== Since 1 January 2002, the national central banks (NCBs) and the ECB have issued euro banknotes on a joint basis.
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.
The notes and coins for the old currencies, however, continued to be used as legal tender until 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 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. ===Eurozone crisis=== Following the U.S.
Statements about this goal were for instance made by Wim Duisenberg, European Central Bank Governor, in 1998, Laurent Fabius, French Finance Minister, in 2000, and Romano Prodi, President of the European Commission, in 2002.
Denmark has negotiated exemptions, while Sweden (which joined the EU in 1995, after the Maastricht Treaty was signed) turned down the euro in a non-binding referendum in 2003, and has circumvented the obligation to adopt the euro by not meeting the monetary and budgetary requirements.
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 the 2004 Summer Olympics issued by Greece.
The Danish krone, Croatian kuna and Bulgarian lev are pegged due to their participation in the ERM II. In total, , 182 million people in Africa use a currency pegged to the euro, 27 million people outside the eurozone in Europe, and another 545,000 people on Pacific islands. Since 2005, stamps issued by the Sovereign Military Order of Malta have been denominated in euros, although the Order's official currency remains the Maltese scudo.
Together this direct usage of the euro outside the EU affects nearly 3 million people. The euro has been used as a trading currency in Cuba since 1998, Syria since 2006, and Venezuela since 2018.
Beginning in 2007 or 2008 (depending on the country), the old map was replaced by a map of Europe also showing countries outside the EU like Norway, Ukraine, Belarus, Russia and Turkey.
Former Federal Reserve Chairman Alan Greenspan gave his opinion in September 2007 that it was "absolutely conceivable that the euro will replace the US dollar as reserve currency, or will be traded as an equally important reserve currency".
This may be because of the inclusion of the Financial crisis of 2007–2008 and ongoing integration within the EU.
Following the financial crisis of 2007–2008, governments in these countries found it necessary to bail out or nationalise their privately held banks to prevent systemic failure of the banking system when underlying hard or financial asset values were found to be grossly inflated and sometimes so near worthless there was no liquid market for them.
dollar since the end of 2002, peaking at US$1.60 on 18 July 2008 and since then returning near to its original issue rate.
Beginning in 2007 or 2008 (depending on the country), the old map was replaced by a map of Europe also showing countries outside the EU like Norway, Ukraine, Belarus, Russia and Turkey.
financial crisis in 2008, fears of a sovereign debt crisis developed in 2009 among investors concerning some European states, with the situation becoming particularly tense in early 2010.
The share of the euro as a reserve currency increased from 18% in 1999 to 27% in 2008.
Afterwards it regained and its exchange rate reached its historical highest point in 2008 (15 July vs U.S.
In late 2009, the euro became immersed in the European sovereign-debt crisis, which led to the creation of the European Financial Stability Facility as well as other reforms aimed at stabilising and strengthening the currency. ==Administration== The euro is managed and administered by the Frankfurt-based European Central Bank (ECB) and the Eurosystem (composed of the central banks of the eurozone countries).
financial crisis in 2008, fears of a sovereign debt crisis developed in 2009 among investors concerning some European states, with the situation becoming particularly tense in early 2010.
In 2009, Zimbabwe abandoned its local currency and 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 currency after the U.S.
On 28 July 2009, São Tomé and Príncipe signed an agreement with Portugal which will eventually tie its currency to the euro.
This could result in high unemployment and lower incomes as it was during European sovereign-debt crisis. ====Trade==== A 2009 consensus from the studies of the introduction of the euro concluded that it has increased trade within the eurozone by 5% to 10%, although one study suggested an increase of only 3% while another estimated 9 to 14%.
financial crisis in 2008, fears of a sovereign debt crisis developed in 2009 among investors concerning some European states, with the situation becoming particularly tense in early 2010.
Although a more recent meta-analysis shows that publication bias decreases over time and that there are positive trade effects from the introduction of the euro, as long as results from before 2010 are taken into account.
On a global level, there is evidence that the introduction of the euro has led to an integration in terms of investment in bond portfolios, with eurozone countries lending and borrowing more between each other than with other countries. ====Effect on interest rates==== As of January 2014, and since the introduction of the euro, interest rates of most member countries (particularly those with a weak currency) have decreased.
Together this direct usage of the euro outside the EU affects nearly 3 million people. The euro has been used as a trading currency in Cuba since 1998, Syria since 2006, and Venezuela since 2018.
The monuments looked similar enough to different national monuments to please everyone. The Europa series, or second series, consists of six denominations and no longer includes the €500 with issuance discontinued as of 27 April 2019.
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