Euro

The euro (plural euro, symbol: '''€'''; and single Currency for over 300 million Europeans in the following twelve European Union member states:
, San Marino , and Vatican City . It is the ''de facto'' currency of Andorra , Kosovo and Montenegro .

The euro was introduced to world financial markets in 1999 and launched as a currency in 2002. All EU member states are eligible to join if they comply with certain monetary requirements.

The euro is managed and administered by the Frankfurt -based European Central Bank (ECB) and the European System Of Central Banks (ESCB) (composed of the Central Bank s of its member states). As an independent Central Bank , the ECB has sole authority to set Monetary Policy . The ESCB participates in the printing, minting and distribution of Notes and Coins in all member states, and the operation of the eurozone payment systems.

CHARACTERISTICS OF THE EURO

Coins and banknotes

Main articles: Euro Coins , Euro Banknotes

The euro is divided into 100 Cents . In each country but Greece, which uses ''λεπτό'' and ''λεπτά'' on its coins, the form "cent" is officially required to be used in legislation in both the singular and in the plural, though in common usage and in official material aimed at the general public, it is common to translate these into the local language, for example ''cents'' in English and ''centesimo-centesimi'' in Italian. (For more information on language and the euro, see Linguistic Issues Concerning The Euro .)

All euro coins (including the is legal tender not only in Spain, but also in all other member states where the euro is in use. There are €2, €1, 50c, 20c, 10c, 5c, 2c and 1c coins, though the latter two are not generally used in Finland or the Netherlands (but are still legal tender).

All euro banknotes have a common design for each denomination on both sides. Notes are issued in the following values: €500, €200, €100, €50, €20, €10, €5. Some of the higher denominations are not issued in a few countries, though again, are legal tender.

Both euro coins and banknotes are designed from the start in consultation with organizations representing people suffering from Blindness or other Vision Impairments . Both have been designed to facilitate their use by people who may not be able to see the currency very well (or at all). Cues to aid in identification include gross differences in appearance (colour, size) for banknotes and coins, and tactile cues such as thickness and edge decoration for coins in particular. Although there have been other currencies predating the euro that were specifically designed in similar ways (different sizes, colours, and ridges) to aid the visually impaired, the introduction of the euro constitutes the first time that the authorities have consulted associations representing the blind before and not after the event. For details, see the Euro Coins and Euro Banknotes articles.

The ECB has set up a Clearing System for large euro transactions ( TARGET ).
All intra- Eurozone transfers shall cost the same as a domestic one. This is true for retail payments, although several ECB payment methods can be used. Credit card charging and ATM withdrawals within the eurozone are also charged as if they were domestic. The ECB hasn't standardized paper based payment orders, such as cheques; these are still domestic based.

The symbol

See Also: Euro symbol

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A special , a former chief graphic designer for the EEC , who claims to have created it as a generic symbol of Europe.

The symbol is (according to the European Commission ) "a combination of the Greek Epsilon , as a sign of the weight of European civilisation; an E for Europe; and the parallel lines crossing through standing for the stability of the euro".

The European Commission also specified a euro logo with exact proportions and foreground/background colour tones {Link without Title} . Although some font designers simply copied the exact shape of this logo as the euro sign in their fonts, most designed their own variants, often based upon the capital letter C in the respective font. The illustration at the top of this section shows the official euro logo.

No "official" recommendation is made with regard to the use of a Cent Sign , and sums are often expressed as decimals of the euro (for example €0.05 or even €–.05 rather than 5¢ or 5c). As a result the abbreviations differ between eurozone members. The most used abbreviation is "c", but other abbreviations also exist, like "¢" (Ireland, but "c" is used more frequently), "ct" (among others: Germany), snt (Finland), the capital letter ''lambda'' (Λ) (Greece).

Placement of the symbol varies from nation to nation. While the official recommendation is to place it before the number, people in many countries have kept the placement of their former currencies.

ECONOMIC AND MONETARY UNION

History (1990-2002)

:''Main article: .
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.

Economist Robert Mundell is sometimes referred to as the father of the euro.
Other economists that helped include Wim Duisenberg , Robert Tollison , Neil Dowling and Tommaso Padoa-Schioppa . (For macro-economic theory, see Below ).

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 euro of these subdivisions (which represent the Exchange Rate s at which the currency entered the euro) are shown at right.

The above 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 , 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.

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 , with a Greek Drachma (GRD) exchange rate of 340.750000.

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 .

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 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 up to forever (Austria, Germany, Ireland, Spain). 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.

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, two, six or seven cents are rounded down, and those ending in three, four, eight or nine cents are rounded up. Despite this convention, the one-cent and two-cent coins are still legal tender in Finland.

Current eurozone (2002-2007)

See Also: Eurozone

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