Economics and Business
When was the euro introduced?
The euro, the currency of the 12 European Union nations—Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, and Finland—went into circulation January 1, 2002, becoming part of daily life for more than 300 million people. The banknotes and coins replaced national currencies, making the franc, deutschmark, peseta, and lira, among others, history in the participating nations.
The euro’s origins can be traced to a series of international agreements, beginning in 1978, which were made among the members of what was then called the European Community, or EC. In February 1986 the framework for the unified monetary system was agreed upon by nations who signed the Single European Act, creating “an area without internal frontiers in which the free movement of goods, persons, services, and capital is ensured.” The 1989 Delors Report outlined a plan to introduce the currency in three phases. The final phase of that plan began on January 1, 1999, when the 11 countries (later to become 12) belonging to the European Union established the conversion rates between their respective national currencies and the euro, creating a monetary union with a single currency. A three-year transition phase followed, during which monetary transactions could be made in euro, but there was no requirement to do so. On January 1, 2002, the central banks of the 12 participating countries put into circulation about 7.8 billion euro notes and 40.4 billion euro coins, together worth 144 billion euros. Simultaneously each country began to withdraw its own currency from circulation. By February 28, 2002, the changeover was complete, meaning the national currencies were completely withdrawn and only the euro was in circulation.
When 10 new nations (Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia) joined the EU on May 1, 2004, there was no timetable for their adoption of the euro. Previously, in 2003, Sweden voted against joining the euro area.