ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

What is the Euro?

Updated on November 20, 2013


The Euro as a currency came into effect in January 2002, it became legal tender in a number of European countries as their own national currency was withdrawn. The Euro was to become the single currency of the common market and would bring member states closer together. No longer would the holiday maker's of Europe have to exchange their French Franc's to get Italian Lira when they took their vacation.

The bureaucracy and red tape of European trade would be removed and economies would remain more fluid.The Euro represented a removal of another obstacle to full European integration and an end to historic rivalries and hatreds. The Euro was also designed to be a rival to the mighty US Dollar and the Euro was modeled on much of the Dollar's successful points.


A German Euro Coin
A German Euro Coin | Source

The Origin of the Euro


The Euro was first proposed in the Maastricht Treaty of 1992, and only two of the European Union's member's at that time opted out of it. Of the 27 members of the Eurozone, there are 17 countries that use the Euro as their primary currency. Denmark, Great Britain and Sweden are the most notable members not to use the European currency.

All new member states of the European Union must join the Euro currency at some point of their membership, the option of "opting out" was reserved for the established member's. If you want to be part of the European Union, you have to accept the Euro.


What are the conditions of membership?


Before a European member State can adopt the Euro, it must fulfill certain economic and legal criteria. The economic " convergence criteria" is designed to ensure that a member State's economy is sufficiently prepared for adoption of the single currency. The applicant State must shoe it can integrate smoothly into the monetary system of the Eurozone. They also require that national legislation, in particular the national central bank and monetary issues, are compatible with the Treaty.

What happened to the old Currency?


When the Euro became legal tender in 2002, the States that signed up had to exchange their national currency for the new Euro. The replaced currencies were given individual time frames to remain legal tender. Many of the Euro countries will still accept their old currency in Bank's for the foreseeable future but will only pay out in Euro currency. No country in the Euro will continue to print or mint their old currency though.


The European Central Bank in Frankfurt, Germany.
The European Central Bank in Frankfurt, Germany. | Source

Current European countries in the Euro.

Member
Former Currency
 
Austria
Schilling
 
Belgium
Franc
 
Cyprus
Pound
 
Estonia
Kroon
 
Finland
Markka
 
France
Franc
 
Germany
Deutshmark
 
Greece
Drachma
 
Ireland
Pound
 
Italy
Lira
 
Luxembourg
Franc
 
Malta
Lira
 
Netherlands
Guilder
 
Portugal
Escudo
 
Slovakia
Koruna
 
Slovenia
Tolar
 
Spain
Peso
 

Where is the Euro printed and minted?


There are currently 17 mint's that are authorized to print or mint the Euro currency, Five of these Mints are in Germany. Each member State of the Euro can display a National design on one side of the Euro, while the flip side will show the map of the European Union.


Positive points of the Euro

The adoption of the Euro will offer the new member's these benefits...

  • As a single entity the European Union and it's united Euro currency could overtake the power of the American Dollar. This is theory should increase the trading ability of the Eurozone States, and operate the same as US States behave in their union.
  • Less expense and paperwork when trading with fellow European States.
  • The ability to weather financial crisis as a single unit
  • A consistent and solid system of Banking
  • Budgets of the member States will be sensible and economies will be synchronised.


Negative points of the Euro


Critics of the Euro believe the currency has a negative impact because of,,,

  • A fixed interest rate means National economies cannot take action to prevent problems escalating.
  • The European Central Bank is less interested in financial growth and too fearful of inflation.
  • The Euro operates a one size fit's all approach to the Eurozone economy, it makes no allowances in comparing a dominant economy such as Germany against a weaker economy such as Greece.
  • The elected members of the ECB look after their own countries interests over that of the whole Eurozone.



Your Vote

Will the Euro still exist in 2113?

See results

The future of the Euro


The short term future is dependent on the European Central Banks ability to keep the economies of weaker nations within the Euro. To lose member's such as Greece, Portugal, Ireland or Spain would leave the whole of Europe in an awkward position. It would lead to the likely establishment of a multiple tier system of membership for Europe as a whole. There would be those States that could follow the European dream to the finish line such as Germany and France, those countries that are out of the Euro but closely tied to it such as Great Britain and Denmark and another level who have been left severely damaged by been unable to adhere to the Euro's economic guidelines. The stronger economies may have to support the weaker economies until the recession and debt crisis is resolved.

Long term the Euro will be firmly established as so much time and effort has been invested in the program, Germany and France are the powerhouses of European finance and as long as they remain committed to the program the Euro will survive in one form whatever the crisis. It is highly unlikely the Franco-German nations will return to their respective former currencies. The big question is if other nations leave the Euro, will it make other nations question the Euro's worth on a global scale.



Comments

    0 of 8192 characters used
    Post Comment

    • Asp52 profile imageAUTHOR

      Andrew Stewart 

      4 years ago from England

      Thank you, I believe if the economies are similar then it is a good idea in principle. At present Greece, Italy, Germany and France have different needs.

    • profile image

      Howard Schneider 

      4 years ago from Parsippany, New Jersey

      Excellent informational Hub, Asp52. I believe the keeping of all the European nations utilizing the Euro as their currency is key to the strength of the European Union and will ensure its future economic strength.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)