The Euro was officially introduced in 1999, but it had been a long time in the making before it finally came into fruition.
It had been a goal of the European Union and its predecessors to launch the Euro since the 1960s, but due to tough negotiations and opposition from some member states, it took until 1999 for it to be officially introduced.
This detailed guide will explain everything you need to know about the Euro, when it was introduced and why.
Launch of the Euro
On January 1st 1999, the Euro was adopted by 12 members of the European Union, including France, Spain and Italy.
While the launch occurred in 1999, it wasn’t until late 2001 and early 2002 that Euro notes and coins began to circulate.
It took numerous years for it to become the only legal tender for these countries, but by 2002, the largest currency changeover the world had ever seen occurred.
Largest currency changeover
When notes and coin denominations of the Euro were introduced into circulation in 2002, it was the largest-ever currency changeover. Approximately 52 billion Euro coins and 14 billion Euro notes were produced in preparation for the launch of the Euro in 2002.
These Euro coin and notes denominations were then distributed to over 218,000 banks, post offices and businesses in the 12-member countries of the European Union who had adopted the Euro as their form of currency.
Despite it being the largest-ever currency changeover, it proved to be a huge success. This was largely because the public were so readily willing to accept their new form of currency. The changeover also ran smoothly as there were thorough preparations ahead of the launch, as well as there being active participation from the many post offices and banks involved.
Benefits of the Euro
Of course, the Euro wouldn’t have been first introduced if it didn’t hold some significant value and benefits to the European Union.
The Euro is managed by the European Central Bank; the central body responsible for monetary policy in the countries in the EU who have adopted the Euro. Its main aim is to maintain price stability and helping to preserve the purchasing power of the Euro.
Find out below some more of the advantages and benefits of the Euro.
- Travel has been made easier for citizens of the EU who adopted the Euro as there is no longer a need for exchanging money before you travel to another Euro-accepting country.
- Currency risks have been removed.
- Citizens can identify and recognise the best price for a product from any company in the participating countries; it eliminates the need for a currency converter.
- There is increased competition between businesses who use the Euro and it also allows good and services to flow more easily between the countries who use it.
- It allows smaller countries to enjoy lower interest rates and it also means that they’re backed up by some of the most powerful countries in the European Union such as Germany and France.
The Euro today
Ever since the Euro first launched in 1999, there are now 19 European Union countries who have joined the Euro as their currency tender. It’s the second most-used currency worldwide, after the US Dollar. It’s followed in succession by the Japanese Yen, the Great British Pound and the Australian Dollar.
While not every country belonging to the European Union uses the Euro as their currency, many countries have a deal whereby the central exchange rate to the Euro is fixed. Countries participating in this deal include Denmark, Bulgaria and Croatia.
Despite not every country adopting the Euro as their currency, there are more members of the European Union than ever trying to adopt it. However, there are conditions which must be met in order to be accepted into the Euro.
The United Kingdom and Denmark have opt-out clauses which means that they are exempt from participation in the Euro and will never be made to join it. Therefore, the United Kingdom trades Pound vs Euro Exchange Rate.
Like many other currencies, the Euro has several currency denominations in both notes and coin form.
Ever since the Euro was officially first introduced in 1999, it’s provided many benefits for the participating member states. While there are of course many advantages to enjoy, there are also a few disadvantages and often discrepancies regarding the Euro. Some countries are reluctant to give up their own form of currency as they believe they will lose all control of their country’s monetary policies and economy.
The 19 countries that have adopted the Euro as their currency, including France, Spain, Austria and Belgium are all regulated by the European Central Bank who ensures that exchange rates between other countries are as fair as possible.