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It began as a noncash monetary unit in before being issued as currency notes and coins in The euro replaced the national currencies of participating EU states and some non-EU states. The euro arose from the Maastricht Treatyin which the 12 original member countries of the European Community now the European Union created an economic and monetary union and a corresponding common unit of exchange. The new currencythe euro, was officially issued on January 1, Although its use was initially limited to financial markets and certain businesses, participating member states began using euro currency notes and coins in Since the euro has been managed by the European Central Bank.
Located in Frankfurt, Germany, the ECB is an independent and neutral body headed by an appointed president. This president must be approved by all member countries and serves an eight-year term. No, the entire European Union does not use the euro. As of only 19 of the 27 EU member states use the euro as their sole currency. Unlike many competing currencieseuro banknotes do not display images of prominent national figures.
Instead, every note features a map of Europe, the flag of the European Unionand recognizable architectural imagery. It was introduced as a noncash monetary unit in West Euroa singles, and currency notes and coins appeared in participating countries on January 1, After February 28,the euro became the sole currency of 12 EU member states, and their national currencies ceased to be legal tender. Other states subsequently adopted the currency.
The treaty called for a common unit of exchange, the euro, and set strict criteria for conversion to the euro and participation in the EMU. These requirements included annual budget deficits not exceeding 3 percent of gross domestic product GDPpublic debt under 60 percent of GDP, exchange rate stability, inflation rates within 1. Although several states had public debt ratios exceeding 60 percent—the rates topped percent in Italy and Belgium—the European Commission West Euroa singles executive branch of the EU recommended their entry into the EMU, citing the ificant steps each country had taken to reduce its debt ratio.
Supporters of the euro argued that a single European currency would boost trade by eliminating foreign exchange fluctuations and reducing prices. Although there were concerns regarding a single currency, including worries about counterfeiting and loss of national sovereignty and national identity, 11 countries AustriaBelgium, FinlandFrance, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain formally ed the EMU in Britain and Sweden delayed ing, though some businesses in Britain decided to accept payment in euros.
Voters in Denmark narrowly rejected the euro in a September referendum. Greece initially failed to meet the economic requirements but was admitted West Euroa singles January after overhauling its economy. In Slovenia became the first former communist country to adopt the euro. Having demonstrated fiscal stability since ing the EU inboth Malta and the Greek Cypriot sector of Cyprus adopted the euro in Other countries that adopted the currency include SlovakiaEstoniaLatviaand Lithuania The 19 participating EU countries are known as the euro areaeuroland, or the euro zone.
Based in FrankfurtGermany, the ECB is an independent and neutral body headed by an appointed president who is approved by all member countries to serve an eight-year term. The euro was launched on January 1,replacing the precursor ecu at a value. Until the circulation of currency notes and coins inthe euro was used only by financial markets and certain businesses. Many experts predicted that the euro could eventually rival the U.
Unlike most of the national currencies that they replaced, euro banknotes do not display famous national figures. The eight euro coins range in denominations from one cent to two euros. Videos Images. Additional Info. Print Cite verified Cite.
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Articles from Britannica Encyclopedias for elementary and high school students. European Union: Euro Zone. See all media.
Show more. Top Questions. Full Article. Get a Britannica Premium subscription and gain access to exclusive content. Subscribe Now. Understand the origin, structure, and working of the European Central Bank. Overview of the European Central Bank, including a discussion of the euro. Various denominations of the euro currency.
Euros, the currency of the European Union. Learn More in these related Britannica articles:. Western European countries have traditionally done much of their trading with each other. Soon after the breakdown of the Bretton Woods system, some of these countries experimented with fixed exchange rates within their group. Beforehowever, all such attempts had failed within a…. Germany: Helmut Kohl and the struggles of reunification. In Spain adopted the euro as its official West Euroa singles unit, and in the euro replaced the peseta as the national currency.
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