Creation History of the euro

1 creation

1.1 launch
1.2 minting
1.3 change of currency
1.4 aftermath
1.5 growth

creation
launch

eurozone, 1999–2002

the currency introduced in non-physical form (traveller s cheques, electronic transfers, banking, etc.) @ midnight on 1 january 1999, when national currencies of participating countries (the eurozone) ceased exist independently in exchange rates locked @ fixed rates against each other, making them mere non-decimal subdivisions of euro. euro became successor european currency unit (ecu). notes , coins old currencies, however, continued used legal tender until new notes , coins introduced on 1 january 2002 (having been distributed in small amounts in previous december). beginning on 1 january 1999, bonds , other forms of government debt eurozone nations denominated in euros.

the value of euro, started @ usd 1.1686 on 31 december 1998, rose during first day of trading, monday, 4 january 1999, closing @ approximately usd 1.18. rapidly taken , dealers surprised speed @ replaced national currencies. trading in deutsche mark expected continue in parallel vanished markets opened. however, end of 1999 euro had dropped parity dollar leading emergency action g7 support euro in 2001.

later in 2000, denmark held referendum on whether abandon opt-out euro. referendum resulted in decision retain krone, , set plans referendum in uk result. procedure used fix irrevocable conversion rate of 340.750 between greek drachma , euro different, since euro 2 years old. while conversion rates initial eleven currencies determined hours before euro introduced virtual currency, conversion rate greek drachma fixed several months beforehand, in council regulation 1478/2000 (ec), of 19 june 2000.

minting

the designs new coins , notes announced between 1996 , 1998, , production began @ various mints , printers on 11 may 1998. task large, , require full 3 years , half. in all, 7.4 billion notes , 38.2 billion coins available issuance consumers , businesses on 1 january 2002. in 7 nations, new coins, struck in run-up 1 january 2002, bear 2002 date. in belgium, finland, france, netherlands, , spain, new coins bear date of striking, 5 countries ones strike euro coins dated 1999, 2000, , 2001. small numbers of coins monaco, vatican city, , san marino struck. these became popular collector s items, commanding premiums above face value. new issues continue day.

euro pocket calculators sold or offered in many countries.

meanwhile, parallel task educate european public new coins. posters issued showing designs, used on items ranging playing cards t-shirts. final step, on 15 december 2001, banks began exchanging euro starter kits , plastic pouches selection of new coins in each country (generally, between 10 , 20 euros worth—though finland s contained 1 of each coin, totalling €3.88). not usable in commerce until 1 january, when notes made available well. larger starter kits, containing roll of each denomination, available in nations.

retailers , government agencies had considerable task well. items sold public, dual pricing commonly utilised. postage stamps governments (as stamps issued united nations postal administration un offices in vienna) bore denominations both in legacy currency , euros, assuring continued utility beyond 2001. banks bore huge task, not in preparation change of notes , coins, in office. beginning in 1999, deposits , loans technically in euros, deposits , withdrawals continued in legacy currency. statements bear balances in both currencies beginning no later 1 july 2001, , earlier if required customer s needs.

beginning on 1 december 2001, coins , notes distributed secure storage, first large retailers, , smaller ones. expected there massive problems on , after 1 january. such changeover, across twelve populous countries, had never been attempted before.

change of currency

euro banknotes , coins of various denominations.

the new coins , notes first valid on french island of réunion in indian ocean. first official purchase using euro coins , notes took place there, 1 kilogram of lychees. coming of midnight in frankfurt @ ecb offices, though, symbolised transition.

in finland, central bank had opened hour @ midnight allow citizens exchange currency, while huge euro pyramid had decorated syntagma square in athens. other countries noted coming of euro well—paris s pont neuf decorated in eu colours, while in northern german town of gifhorn sombre, symbolic funeral deutsche mark took place.

except germany, plan introduction of new currency same. banks accept exchange of legacy currencies, begin dispense euros atms, , euros available withdrawals made, beginning on 1 january. merchants accept legacy currency, give change in euros. in germany, deutsche mark no longer legal tender on 1 january, have exchanged @ banks.

despite massive amounts of euros available, chaos feared. in france, these fears accentuated threatened postal workers strike. strike, however, settled. similarly, workers @ french bank bnp paribas threatened disrupt introduction of euro currency strike. settled.

in practice, roll-out smooth, few problems. 2 january, atms in 7 countries , @ least 90 percent in 4 others issuing euros rather legacy currency, italy, worst offender, having 85% of atms dispensing euros. unexpected tendency of consumers spend legacy currency, rather exchange @ banks, led temporary shortages of euro small change, consumers being given change in legacy currency.

some businesses did take advantage of currency exchange raise prices. according study deutsche bundesbank, there price rise, consumers refused buy much. coffee bar in italy took advantage of transition raise coffee prices third ordered pay compensation customers.

aftermath

nations allowed keep legacy currency in circulation legal tender 2 months, until 28 february 2002. official date on national currencies ceased legal tender varied member state member state. earliest date in germany; mark officially ceased legal tender after 31 december 2001. member states, though, permitted legacy currency remain in circulation full 2 months. legacy currency exchangeable @ commercial banks in currency s nation further period, until 30 june 2002.

however, after official dates, continued accepted exchange national central banks varying periods—and indefinitely in austria, germany, ireland, , spain. coins 4 countries, italy, , finland remain exchangeable. earliest coins become non-convertible portuguese escudos, ceased have monetary value after 31 december 2002, although banknotes remain exchangeable until 2022. banknotes current on 1 january 2002 remain valid until @ least 2012.

in germany, deutsche telekom modified 50,000 pay phones take deutsche mark coins in 2005, @ least on temporary basis. callers allowed use dm coins, @ least initially, mark pegged equal 1 euro, twice usual rate.

in france, receipts still indicate value of products in legacy currency along euro value, receipts in slovenia. in other eurozone countries has long been considered unnecessary. in june 2008, new york times reported many merchants in french town of collobrières, in provence, choose accept exchangeable franc notes.

euro usage in world (blue , purple, click detail).


early growth

after dropping interday low of $0.8296 on 26 october 2001, , brief crash $0.8115 on 15 january 2002, euro recovered slump. value last closed below $1.00 on 6 november 2002 ($0.9971), , increased rapidly there. peaked @ $1.35 in 2004, , reached highest value versus u.s. dollar @ $1.5916 on 14 july 2008. values increased against pound sterling in late-2000s, peaking @ 97.73p on 31 december 2008, international usage grew rapidly. euro grew in importance steadily, share of foreign exchange reserves rising 18% in 1999 25% in 2003 - while dollar share fell equivalent margin. alan greenspan in 2007 said eurozone had profited euro s rise , claimed conceivable trade equally or become more important dollar in future.