Euro - SpeedyLook encyclopedia

Parts and tickets

All the parts in euro have a European face (1, 2 and 5 eurocents: Europe in the world ; 10,20 and 50 eurocents: Europe like an alliance of States ; 1 and 2 euros: Europe without borders ) and a face specific to the country from where the part is emitted (including for Monaco, San Marino and the the Vatican, States in monetary union with their immediate neighbors which was authorized to strike their own parts).

Obviously, all the parts are in theory usable in all the Member States: for example, a part with the portrait of Juan Carlos has legal value not only in Spain but also in all the other countries of the euro area. Compatibility issues were however raised on certain automats (vending machines, tolls…)

A new series of parts should be also struck at the end of the decade 2000-2010, would be this only to take account of widening with new countries (currently, five Member States not parts with the euro are represented on the various parts).

The tickets, as for them, have a model common to all the Euro area. The bridges, doors and windows of the tickets symbolize the opening of Europe on the rest of the world and the bonds between the people.

A new series of tickets should appear starting from the end of the decade 2000-2010 so in particular taking account of the widening of 2004 and 2007 on the charts represented.

For the description of the coins and tickets in euros, please refer to the following articles:

banknotes in euros;
parts in euros intended for circulation;
commemorative parts in euros intended for circulation: parts of 2 euros, at a rate of an emission per annum and per country;
collector's items in euros not intended for circulation;

History of the euro

Introduction of the euro

Novel members of the European Union

Adhesion with the euro is obligatory for the novel members of the European Union (EU), but each country into fixed the date and must observe the economic conditions necessary.

on January 1st, 2007: the Slovenia adopted the euro.
on January 1st, 2008: Malta and Cyprus will adopt the euro, green light having been obtained Commission and ECB on May 16th, 2007; effective adhesion was accepted at the time of the European Council of June 21st, 2007; the agreement was signed for their adhesion at the time of Eurogroupe of July 10th, 2007.

The dates of adoption of the euro by the other novel members of the EU were not fixed yet. However, the following estimates can be made:

date estimated in 2009: the Slovakia;
date estimated in 2010: the Lithuania;
date estimated in 2011: the Latvia, the Hungary;
date estimated in 2012: the Czech Republic, the Poland;
date estimated in 2014: the Romania;
unspecified date: the Bulgaria, the Estonia.

All these countries initially integrated the mechanism of European exchange {{Romain|II}} (MCE {{Romain|II}}), which makes it possible to test the stability of the currencies during a 2 years minimum.

As of on December 15th, 2004, the Estonia, through Eesti Pank (the national bank), adopted the drawings national face of the parts in euros.

February 24th, 2005, Lietuvos Bankas also selected, after surveys and investigations, the drawing of the Lithuanian national face, which represents the knight Vytis on all the parts.

October 10th, 2005, Banka Slovenije presented its euros, which offer different representations on each part.

Since January 8th, 2007, the center of the euro area is in France in the Regional natural park of Morvan on the commune of Mhère (not exact: 3°53' 27" E 47°11' 40" NR). Calculations were carried out at the national geographical Institute (IGN) and since 1980 by Jean-Georges Affholder, a geodesist. This epicentre is given thanks to a mathematical formula which applies to a surface which one knows contours, while taking account of the rotundity of the ground. Before Slovenia does not adopt the euro, the center was in the town of Montreuillon.

Nonadherent Member States of the European Union

From the three members of the EU (to fifteen) not participants, only the the United Kingdom and the Denmark obtained a clause known as of opting-out , allowing them to remain apart from the single currency, even if they had suddenly filled the conditions of membership, clause confirmed by the the Treaty of Rome of 2004. This clause does not prohibit to them however to adhere later on.

Also the the United Kingdom, contrary to the Denmark, does not form part of MCE {{Romain|II}}, although meeting the conditions of the Treated of Maastricht, because it does not wish to bind the foreign exchange rate of the Pound sterling to the euro. Since the Pound sterling left late EMS (based on old the European Unit of Account or ECU), its course knew more important variations compared to the euro than the other currencies of the nonadherent Member States, in particular during the first two years of the introduction of the euro which had been temporarily strongly depreciated compared to the American dollar, to the Pound sterling and the Swiss franc. This instability initial east seems it solved and, since, the Pound sterling follows in a way rather close the evolutions to the course of the euro (one can also note that the Swiss franc was also stabilized compared to the euro, and that it would now meet the conditions of entry in MCE {{Romain|II}}, if the Swiss and the Liechtenstein decided to join the European Union).

On the other hand, the Sweden was committed joining the single currency in the long term, and, this, as soon as it meets the conditions of the Traité of Maastricht. In fact, because of a public opinion which remains favorable to the maintenance of the Swedish crown, as the last Référendum proves it on this subject, the Sweden technically does not fill the entry in MCE {{Romain|II}} in order not to be forced to adopt the single currency automatically.

The ten new Member States of the European Union in 2004 must them, in the long term, initially integrate the mechanism of European exchange {{Romain|II}} (MCE {{Romain|II}}) then the euro (six did already it and thus joined the Denmark, to only belong to the mechanism of European exchange {{Romain|II}} (MCE {{Romain|II}}) before widening).

Concerning the last two members of the European Union, the Bulgaria bound its currency, the Lev, with a fixed rate with the euro since 1999, while the Romania removed on July 1st, 2005 four zero with new the Rumanian Leu in order to integrate the euro in 2012.

The euro and other European or dependant currencies

European currencies related to the euro

Within the European Union and applicant countries at the entry in the Union, one find in 2007 the following currencies, which integrated all the MCE {{II}}:

the Cypriot Book (CYP) (Cyprus will adopt the euro on January 1st, 2008);
the To read Maltese (MTL) (Malta will adopt the euro on January 1st, 2008);
the Estonian Crown (EEK) (it was like the tolar Slovenien candidate at the entry in the EMU in 2007, but the conditions of convergence are not met yet, the last evaluation took place in at the end of 2006);
the Latvian Lats (LVL) (it was like the tolar Slovenien candidate at the entry in the EMU in 2007, but the conditions of convergence are not met yet, the last evaluation took place in at the end of 2006);
the Lithuanian Litas (LTL);
the Danish Crown (DKK), with right of opting-out allowing him automatically not to adopt the euro, but which takes part despite everything in MCE ;

new the Bulgarian Lev (BGN), with a unilateral fixed rate, whose transmitting country was not yet member of the European Union and who could not thus be member of the MCE. Bulgaria joined the European Union on January 1st, 2007, and can return at the same time in the MCE, which will enable him to join the EMU as soon as possible in January 2010 if the other stability conditions are filled on this date (however, the transitional stage necessary after approval and the fixing of the irrevocable rate will ask for also a few months of preparation before putting into circulation).

One can note however that the preparatory phases before the introduction of the euro are shortened now considerably, all these countries already negotiating the euro on the international markets and having even stocks of parts and tickets for the foreign exchange market with the private individuals (in particular in the tourist areas). In some of these countries, many trade accept the payments in euros (sometimes even also in parts and tickets), unquestionable practitioner even double posting on a rate close to the central course defined in MCE (which authorizes a variation of 15% of the course, but which in practice varies in much lower margins, the foreign exchange market already being very stabilized, which makes it possible even certain countries unilaterally to guarantee their foreign exchange rate by the intervention of their central bank), or authorizing the opening of accounts in euros for the companies and the administrations, in order to limit the expenses relating to the exchange transactions.

One also notes that in the last days preceding the evaluation by the European commission by a MCE currency; after two years of stability, a greater temporary instability of the course of this currency, related to an anticipation of the market on a forthcoming total convertibility of this currency, which limits the interest to preserve guarantee funds in this currency. But the ECB and the BCN take care to limit this instability and assist the BCN candidate to limit this temporary impact, by buying or massively selling the surpluses of exchange on the financial markets. One thus notes a strong stabilization at the last minute around the central rate defined in MCE , except if the financial liabilities taken by the ECB are too important and require an adjustment to avoid imposing on the BCN candidate debts as of her entry in the EMU, which would not enable him any more to fill the objectives of stability of Maastricht. Also, the central course defined in MCE inevitably do not precede the final convertion rate which will be applied (but which should remain all the same in the band of fluctuation of 15% around the central rate).

Other currencies related to the euro

A certain number of currencies, except European Union, are already dependant through a foreign exchange rate, fixed or variable, with the euro :

the Escudo course-verdien (CVE), previously bound, until 1999, with a fixed foreign exchange rate with the Portuguese Escudo.
the Franc CFP (XPF) was related to the Franc French with a foreign exchange rate fixes 0,055 FRF for 1 XPF before the adoption of the euro. It is now related to the euro by the fixed rate of 1000 XPF for 8,38 € (formerly the frank CFP was bound, like the Franc Djibouti DJF, with dollar-but of the United States USD, before again binding to the Franc French FRF at the time of the demetallisation of the dollar).
CFA franc BCEAO (XOF) or BEAC (XAF), previously bound, until 1999, with the French franc, with a guaranteed rate of exchange (but renégociable with the Banque de France separately for each bank of issue) of 100 XAF or 100 XOF for 1 FRF, formerly 50 XAF or 50 XOF for 1 FRF.
the Frankly Comorian (KMF), previously bound, until 1999, with the French franc with a guaranteed foreign exchange rate (but renégociable with Banque de France) of 75 KMF for a 1 FRF.
the mark of Bosnia-Herzégovine (BAM), previously bound, until 1999, with the German Mark (DEM) with a fixed rate of 1 BAM = 1 DEM during the creation of this currency in 1997/98. The currency was previously named convertible mark . To consult the site of the SFOR).
the Swiss franc (CHF) initially continued to float freely compared to the other European currencies, during the first three years of introduction of the euro. However, the European Union constituting more than 60% of the exchanges of the Swiss and the Liechtenstein, the Swiss national Banque unilaterally decided to maintain the course of the stable Swiss franc compared to the euro, in order to limit the exchange rate risk, by constituting or converting reserve funds into euros. During the first years, the reserve funds of the old national currencies had been tiny room following their conversion (since theoretically it was not necessary any more to maintain funds sufficient for each country), but this funds was reconstituted and even increased to stabilize the course, under the pressure of funds of private sector investments and Swiss large banks which created a value euro SWIFT to facilitate the interbank exchanges.
the euro SWIFT still exists with the international plan, now called euro WIR (CHE); it is compared to a currency (however distinct from the euro) on the interbank financial markets, because its relative stability compared to the euro is still better than that of the Swiss franc itself (whose reserve funds contains more pound sterling and currencies except MCE). However, its use remains subjected to the constitution of guarantee funds paid in euros on an bank account in Switzerland, and its use as a currency of exchange remains limited to the markets of exchanges of services private, on the same model as frankly WIR (CHW) also established as another Swiss private currency but on the basis of fund guaranteed in Swiss francs. The frank WIR, like euro WIR, is subjected to the control of the Swiss monetary authorities, but none is usable in fiduciary form. The operation of these two currencies is similar to funds of co-operative investment: where a unit of currency WIR represents a share of this funds and a right to vote.

European currencies nonrelated to the euro

The following currencies of the Member States of the European Union or candidates with adhesion are not not related to the euro ,

either because their transmitting country, member of the European Union, have the right of opting-out :

the British Pound sterling (GBP), with a right of opting-out , and does not wish to take part either in MCE {{Romain|II}};

either because they do not fill the technical requirements yet of adhesion to MCE {{Romain|II}} (according to the Treated of Maastricht), whereas their transmitting country is already member of the European Union:

the Swedish crown (krona) (SEK), whose transmitting country blocks technically its participation in MCE {{Romain|II}} not to be then obliged to adopt the euro automatically;
the Czech Crown (koruna) (CSK), which should join automatically MCE {{Romain|II}} (probably since 2007) then the euro as soon as the technical requirements are filled;
the Forint Hungarian (HUF), which should join automatically MCE {{Romain|II}} (probably since 2007) then the euro as soon as the technical requirements are filled;
new the Zloty Polish (PLN), which should join automatically MCE {{Romain|II}} (probably since 2007) then the euro (not before 2010) as soon as the technical requirements are filled;

either because their transmitting country candidate with adhesion does not have a case of emission ensuring convertibility:

new the Rumanian Lei (RON), whose transmitting country is a member of the European Union which should join later MCE {{Romain|II}};
the Turkish news Book (TRY), whose transmitting country is candidate with the European Union;
the Croatian Kuna (HRK), whose transmitting country is candidate with the European Union (blocked negotiations during 2005, taken again since);
the Serb Dinar (RSD) (succeeding the Dinar serbo-Montenegrin - CSD), whose transmitting country is candidate, nonofficial, with the European Union.

Value of the euro

Conversion of the euro in the old currencies of the Member States

The value of the euro , expressed in the old currencies of these countries, is the following one: Note: the sign ± beside the rate indicates a central rate of exchange, undergoing variations with the purchase or the sale, but not a single and irrevocable convertion rate. This central rate can vary slightly on the foreign exchange market, but the course is stabilized around this value with very weak variations; the absence of single convertion rate means that the exchange transaction remains subjected to expenses of transaction, which explain the weak variations, compensated permanently by the intervention of the banks centrales.

Foreign exchange rate of the currencies related to the euro

Official foreign exchange rates of the currencies related to the euro are those which follow: Foot-note:

*** These currencies does not use their band of fluctuation, and constantly remains fixed at the central value.
the Estonian Crown and the Lithuanian Litas are also dependant through a “case of emission” but have a limit of fluctuation of 15% (in more and less) as members of the mechanism of European exchange {{Rom|II|2}} (MCE {{Romanian|II|2}}). The Estonia and the Lithuania joined MCE {{Rom|II|2}} on June 28th, 2004, their currencies being already related to the euro before.
the Latvian Lats is since January 1st, 2005 bound, either with SDR of the the IMF, but well with the euro for its nearest entry in MCE {{Rom|II|2}}. The Bank of Latvia fixed a variability of 1% instead of the necessary 15% of MCE {{Rom|II|2}}. The Latvia, Malta and Cyprus adhered to MCE {{Rom|II|2}} on April 29th, 2005.
the Bulgarian Lev is related to the euro thanks to a “ case of émission ” ( currency board ) with a value equalizes with that of old the Deutschemark.
In Serbia, the euro is also the official currency of the Kosovo, province autonomous of the Serb republic, managed by UNO since 1999. The republic of the Montenegro also adopted it like official currency.
the Suisse does not form part of the European Union but unilaterally chose to maintain its stable Swiss franc with the euro. On the financial markets, Switzerland maintains a reserve made up of euros, Swiss francs and currencies MCE {{Rom|II|2}}, allowing him to issue and negotiate euros SWIFT (of an unit value approaching even more precisely the euro on the international interbank markets of compensation, and functioning a little like old the currency-basket ECU; however the euro SWIFT is not a currency legally but a simple quoted value which takes part in the good stability of the Swiss franc compared to the euro). In fact, Switzerland uses in an abstract way the euro (more especially as the Swiss franc itself is supported by a reserve increased in euros true and reduced in other currencies of the MCE II|2 or of pounds sterling).
the Lire Maltese is in fact related to a basket of currencies where the euro has a weight of 70%.
the Moroccan Dirham is related to the euro in a band of nondefinite fluctuation official

Estimate and evolution of the value of the euro in the other currencies

If the euro succeeded the ECU well, the two currencies are quite different. In particular, the ECU, which was a basket, contained currencies like the Pound sterling, which were not integrated in the euro. The two European currencies thus coincided only briefly, during closing times of the markets between the end of 1998 and the beginning of 1999 and, if the ECU existed still, it would have a value now very other that of the euro.

If one wants to reconstitute the value that the euro compared to the dollar would have had before its crystallization of December 31st, 1998, it is advisable to use foreign exchange rates vis-a-vis the dollar of a national currency, and to apply to him its convertion rate into euro. For example, one will take 6,55957 and one will divide it by the value of the dollar into French francs. The result of calculation is reproduced on the graph opposite for the French franc (in red) and Deutschemark (in blue) for all the period which goes from the introduction of the mode of the floating exchanges by Richard Nixon to that of the euro.

During the ten years preceding its introduction, the euro would have thus had a median value of about 1,1825 US dollar calculated with the French franc and 1,20 dollar calculated with the deutschemark.

The most active foreign exchange market of the euro is obviously that compared to the dollar US. The parity Euro/dollar is the financial instrument more treated in the world. It is an indicator headlight, follow-up daily by all the economic circles and financial.

Evolution:

January 4th, 1999: 1 EURO = 1,1680 USD
October 26th, 2000: 1 EURO = 0,8252 USD (low course since 1999, at May 24th, 2006)
December 28th, 2004: 1 EURO = 1,3633 USD (higher course since 1999, at May 24th, 2006)
April 27th, 2007: 1 EURO = 1,3682 USD
July 13rd, 2007: the euro passes the bar of 1 EURO = 1,380 USD
September 28th, 2007: the euro passes the bar of 1 EURO = 1,4272 USD (higher course since its introduction, at September 28th, 2007
October 31st, 2007: 1 EURO = 1,45 USD
November 20th, 2007: 1 EURO = 1,48 USD

Transition from the national currencies to the euro (euro area)

The transition from the national currencies to the euro for the 11 Member States of the first euro area spread out on a little more than three years, of 1999 at beginning 2002:

January 1st, 1999
Passage of the financial markets to the euro, which included/understood moreover:

the foreign exchange market,
the stockmarkets,
the national debt,
the treasuries of the Undertaken S, interfaces some with the Banque S and the financial markets.

January 1st, 1999 at December 31st, 2001
Passage of the currency of transaction of the national currencies to the euro.

This phase required the adaptation to double-circulation then with the euro of the applications Informatique S of management, and the rocker with the euro of the Comptabilité S of the companies.
Très few Entreprise S rocked their countable currency with the euro before January 1st, 2000, because of the workload caused by the data-processing passage to the year 2000, because this transition complicated also the charts of accounts; number of them thus held an accountancy only in the old currency during the transitional period.
the rockers were carried out for the majority beginning 2001, or on dates close according to the beginnings to financial years.

Beginning 2002: passage of the fiduciary currency (tickets and coins) to the euro.
La lasted of this period was variable according to the countries (of a few weeks in three months).

Sources:

European Central bank
Banque de France
Oanda.com, for the historical data 1972-1999.
Forex-office.com, for the daily historical data since January 1999.

Economic aspects and data processing

The euro has as a function to bring, through a single currency, a cohesion of the economic policies of the members of the European Union and to support the intra-Community trade. So the euro is also a political tool of European integration.

Euro and inflation

Starting from the introduction of the euro, the inflation perceived in France was definitely higher than real inflation.

However, inflation in the euro area did not increase as from 2002, date of introduction. Between 2000 and 2006, it fluctuated between 1,9% and 2,3%. In 2003, the average increase in the price the consumer due to the swing with the euro accounted for only approximately 0,1 to 0,3% of the normal level of inflation of 2,3% for the year in question. Thus, the price index within the euro area remained lower than that of the European countries who did not introduce the single currency.

The Banque de France showed that the introduction of the euro occurred simultaneously with an important rise in the prices of the Immobilier and Oil products. In addition, certain sectors (Hotel lery, Tobacco for example) knew strong price increases since the introduction of the euro, the French Minister for Finance, Thierry Breton, had to propose later on a special index related to the cost of the basket of purchase to the supermarket to answer criticisms of consumers' associations. INSEE introduced a personalized indicator of inflation.

Euro and freedom of the Monetary policy

The euro or the Spanish miracle

The euro is one of the factors explaining the strong contemporary economic increase of Spain. After the monetary crises of the South American countries at the end of the Years 1990, much from the Spanish capital returned to Spain and of the South American capital found refuge in Europe. Indeed they found in the euro a more reliable currency nonprone to strong devaluations.

Presence in the electronic Documents and the Databases

The euro is present today in the electronic documents and the databases of many countries, not only of the economic and monetary Union, but also of many countries of the world. It should be noted that this currency, like all the others, does not form yet part of a international Norme of Métadonnée S (see Dublin Core), because of the variability of the currencies and the prices subjected to the laws of market evolution; however, the standard ISO 4217 is abundantly used in the data-processing databases and exchanges, and allots the code EURO to the euro, normalizes in quasi obligatory matter for the interbank transfers of currencies and the behavior of the accounts with the place of the often ambiguous monetary symbols (even if the euro has a well defined symbol, the presence of derived currencies not controlled by the ECB is source of new ambiguities).

Notes and references of the article

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