The euro is the official currency adopted by the 19 states that are currently part of the European Economic and Monetary Union (EMU), i.e. Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania , Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain: all of these nations are frequently referred to as the “Eurozone”.
In addition to the members of the Union, other States (the Vatican City, the Principality of Monaco, San Marino) have also adopted the euro on the basis of specific agreements or unilaterally (such as Andorra).
Although Denmark is part of the European Union, it has an opt-out clause. The UK had a similar clause prior to Brexit which sanctioned its exit from the EU. Sweden, which uses its own crown, is not part of the Eurozone either.
Initially introduced only on financial markets in 1999, the euro began to effectively circulate in the twelve countries of the Union only on January 1, 2002. Over time, the other countries joined the Eurozone.
History of the euro: from the Delors Report to the monetary union
The euro has its roots in June 1988 when the European Council assigned to a Committee composed of the governors of the national central banks of the European Community and chaired by Jacques Delors, the task of elaborating a project for the progressive realization of the Economic and Monetary Union. . The so-called Delors Report, the result of those works, proposed the implementation of the Economic and Monetary Union (EMU) in three phases.
The first phase envisaged, starting from 1 July 1990, the liberalization of capital flows between Member States by abolishing all restrictions on their free movement.
The Maastricht Treaty
With the Treaty on European Union, also known as the Maastricht Treaty, in 1992 some provisions were established for the creation of the Economic and Monetary Union. Member States could have adopted the new currency only if they had met certain criteria, including, as is well known, those of a deficit equal to or less than 3% of GDP and a debt / GDP ratio of less than 60 percent.
The second phase, following the Maastricht Treaty, provided for the creation of the European Monetary Institute (EMI) through which cooperation between central banks was to be strengthened and monetary policies coordinated, thus creating the basis for the establishment of the system. European Central Banks (ESCB), for the conduct of a single monetary policy and for the introduction of a single currency. The European Central Bank (ECB) was thus established on 1 June 1988.
In the third phase, once the exchange rates of the currencies of the first 11 member states participating in the monetary union (to which Greece joined on 1 January 2001) were irrevocably fixed, the gradual transition to the single currency took place.
The euro in circulation
Starting from January 1, 1999, a transitional period began in which the euro, although not yet in circulation, could be used as a scriptural currency. From 1 January 2002 the single currency actually entered into circulation, alongside the national currencies until 28 February. From 1 March the national currencies were then definitively replaced by the euro.
The coins in circulation are 1,2,5,10,20 and 50 cents and 1 and 2 euros. On one of the two sides of each coin there is an image common to all the countries that adopt the euro, while on the other there is a symbol linked to the identity of each country, drawn by a national artist.
Banknotes in circulation, on the other hand, are available in six sizes (5, 10, 20, 50, 100 and 200 euros). Each cut is characterized by a different color and size. A bridge is depicted on the back of each banknote, symbolizing collaboration and dialogue between Europe and the rest of the world. Today, every central bank in the European Monetary Union prints one or two banknote denominations.
Name “euro”: origin and meaning
Adopted by the Madrid European Council in 1995 to replace the acronym ECU (European Currency Unit), the name euro represents the initial letters of the word Europe. Its symbol € also recalls the epsilon of Greece, the cradle of European civilization.
Where they are minted and printed
The euros are physically minted and printed by the national mints and the respective central banks are responsible for putting them into circulation. The characteristics of coins and banknotes are fixed by the European Council. The European Central Bank approves the volume and value of the coins issued each year. In view of the first launch of the euro, 52 billion euros in metal coins were produced using 250 thousand tons of metal.
ISO 4217 is an international standard, established by the International Organization for Standardization ISO, which uses three-letter codes to define currency names. The first two letters of the code correspond to the national code (defined by ISO 3166-1 alpha-2). This coding system eliminates the problem caused by names like Dollar, Franc and Pound used in dozens of different countries, but with different values.