what is the euro
The Euro (Euro) is the currency of 19 countries in the European Union .
The 19 member states of the euro are Germany, France, Italy, the Netherlands, Belgium, Luxembourg, Ireland, Spain, Portugal, Austria, Finland, Lithuania, Latvia, Estonia, Slovakia, Slovenia, Greece, Malta, Cyprus.
On January 1, 1999, the single monetary policy (Single Monetary Act) was implemented in the EU countries that implemented the euro. In July 2002, the euro became the only legal currency in the euro area. The euro is managed by the European Central Bank (European Central Bank, ECB) and the European System of Central Banks (ESCB), which consists of the central banks of various euro area countries. In addition, the euro is also the currency of seven non-EU countries (regions): Montenegro, Monaco, San Marino, Vatican City, Switzerland, Andorra and Kosovo.
Distribution area
According to the regulations of the European Union, the euro banknotes were officially circulated from January 1, 2002, and the original currencies of the member states of the euro area stopped circulating from March 1, 2002. Today, more than half of the 27 EU member states have joined the euro zone, but Europe’s second largest economy, the United Kingdom, Denmark and other countries have not yet entered the euro zone due to their own interests and other reasons.
Sweden held a referendum in 2003, according to which it refused to make the euro Sweden’s currency.
Since January 1, 1999, it has been officially used in 11 countries (Euro area countries) in Germany, France, Italy, the Netherlands, Belgium, Luxembourg, Ireland, Austria, Finland, Spain and Portugal, and replaced the above on July 1, 2002. 11 currencies.
Greece joined the euro zone in 2000, becoming the 12th member of the euro zone.
Slovenia joined the euro area on January 1, 2007, becoming the 13th member of the euro area.
Cyprus joined the Eurozone along with Malta on January 1, 2008.
Slovakia joined the euro area on January 1, 2009, bringing the number of euro area members to 16.
Estonia officially launched the euro on January 1, 2011, becoming the 17th member of the euro zone.
Latvia officially joined the euro area on January 1, 2014, becoming the 18th member of the euro area.
Lithuania officially joined the euro area on January 1, 2015, becoming the 19th member of the euro area.
Summary: Countries that officially use the euro are: Germany, France, Italy, the Netherlands, Belgium, Luxembourg, Ireland, Spain, Portugal, Austria, Finland, Lithuania, Latvia, Estonia, Slovakia, Slovenia, Greece, Malta, Cyprus. The overseas territories of certain euro zone countries, such as French Guiana, Reunion, Saint Pierre and Miquelon, Martinique, etc. also use the euro.
Monaco used to use the French franc, San Marino and the Vatican used to use the Italian lira, both of which have been replaced by the euro. According to an agreement between them and the EU, they can also mint euro coins on behalf of the EU .
Andorra used to use French francs and Spanish pesetas. Montenegro and Kosovo used to use German marks . After the above currencies were replaced by the euro, these countries changed to the euro as the actual currency, but there was no legal agreement between them and the EU, no Participate in the European Central Banking System. In October 2004, Andorra began negotiating an agreement with the European Union to allow Andorra to mint euro coins like Monaco, San Marino and the Vatican.
In December 2002, North Korea replaced the U.S. dollar with the euro as the main currency for external circulation and settlement. The U.S. dollar was also replaced by the euro in most black markets and stores that used to use the dollar.
Overall, the euro is already the official currency of 23 countries and regions, and the exchange rates of the official currencies of 28 countries and regions are pegged to the euro.
History background
The euro is the most significant result of European currency reform since the Roman Empire. The euro not only makes the European single market perfect and facilitates free trade among countries in the euro area, but is also an important part of the EU integration process.
Although Monaco, San Marino and the Vatican are not EU countries, they also use the euro and authorize the minting of a small amount of their own euro coins, as they previously used the French franc or the Italian lira as their currency. Some non-EU countries and regions, such as Montenegro, Kosovo and Andorra, also use the euro as a payment instrument.
The euro is administered by the European Central Bank System, which consists of the European Central Bank and the central banks of the various euro area countries. The European Central Bank, headquartered in Frankfurt, Germany, has the power to independently formulate monetary policy. The central banks of the euro area countries participate in the printing, minting and issuance of euro banknotes and euro coins, and are responsible for the operation of the euro area payment system.
The 1957 Treaty of Rome (Treaty of Rome), in December 1969 proposed the establishment of the European Economic and Monetary Union plan.
In March 1969, the Hague Conference of the European Community proposed the idea of ​​establishing a European Monetary Union, and entrusted Pierre Werner, then Prime Minister of Luxembourg, to make specific proposals on this.
In March 1971, the “Werner Plan” was passed, and the construction of the European single currency took the first step. The “plan” advocates building the European Economic and Monetary Union in three phases within 10 years. However, the subsequent oil crisis and financial turmoil put the Werner Plan on hold.
In March 1979, under the advocacy and efforts of France and Germany, the establishment of the European monetary system was announced, and the European monetary unit “Ecuador” was born. European Monetary System EMS (European Monetary System) began to operate.
In February 1986, the European Community signed the “Single European Document”, proposing to establish a unified market by early 1993 at the latest.
In June 1989, the Delors Report was adopted, which advocated the establishment of the European Economic and Monetary Union in three stages: the first step, the complete realization of the free flow of capital; the second step, the establishment of the European Monetary Authority (the predecessor of the European Central Bank). ); the third step is to establish and implement the Economic and Monetary Union to replace the member countries’ currencies with a single currency.
After the first stage was officially launched in 1990, it was necessary to coordinate and unify relevant monetary policies, and the Central Bank Governors Committee began to play an increasingly important role. The status of the European Central Bank was finally established in the Maastricht Treaty.
The European Monetary Authority was established on January 1, 1994 at the beginning of the second phase of the Economic and Monetary Union. Its mission is to coordinate monetary policy, strengthen cooperation among the central banks of member states and prepare for the establishment of the European Central Bank System. The power to formulate and implement monetary policy remains with the governments of the member countries.
On December 10, 1991, the European Community Summit adopted the Treaty on the European Union (commonly known as the Maastricht Treaty) and decided to rename the European Community the European Union. “Mayo” stipulates that no later than January 1, 1999, after the European Council has confirmed, if more than 7 member states meet the “convergence standard”, the single currency can be implemented.
The Treaty on the European Union entered into force in November 1993.
On December 15, 1994, the Madrid summit decided to name the single European currency the euro, replacing the Egyptian.
In December 1995, the unified currency was identified as the euro.
The European Central Bank was established in 1998. In May of the same year, the Brussels summit officially scheduled the list of 11 founding countries of the euro.
On January 1, 1999, the euro was officially issued within the EU member states. It is a supranational currency with independence and legal tender status. According to the “Maastricht Treaty”, the euro is Officially circulated since January 1, 2002. On January 4 of the same year, the euro officially debuted in the international financial market.
On January 1, 2002, after a three-year transition, the single European currency, the euro, officially entered circulation. In July of the same year, the original currency ceased to circulate. Euro banknotes and currency officially entered the market as currency in circulation. On February 28 of the same year, the national currencies of member countries were completely withdrawn from circulation, and the coexistence period of the euro and the currencies of member countries ended.
The cost of putting into use is as high as 160 billion yuan, but the benefits are even greater
The start-up project of the euro is huge. According to economists’ calculations, the cost from the issuance of the euro to its use is as high as 160 billion to 180 billion euros. However, the benefits to the EU from the launch of the euro will be immeasurable.
First of all, the 12-nation euro area is a huge market with unlimited business opportunities. Its annual internal trade volume is as high as 1.4 trillion US dollars, accounting for about 15% of the total global trade. After the implementation of a unified currency, it not only saves huge transaction costs, but also makes the best allocation of talents, capital, technology and resources, so as to obtain the greatest economic benefits. According to preliminary estimates, the single currency will quickly double, or even triple, the volume of intra-European trade.
Nowadays, the residents of the euro zone will immediately feel the benefit that the euro facilitates consumers to choose goods from 12 countries, and consumers will save an average of 12%. For example, salmon in Spain is only 61% of the average price, while Denmark is 133% of the average price; cheese is twice as cheap in the Netherlands as in Italy; potatoes in Ireland are 3.5 times cheaper than in Denmark.