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Euro

2007 Schools Wikipedia Selection. Related subjects: Currency

   CAPTION: Euro
   ευρώ (Greek)


   Banknotes Coins
   Banknotes Coins
   ISO 4217 Code EUR
   User(s) European Union; eurozone: Austria, Belgium, Finland, France,
   Germany, Greece, Republic of Ireland, Italy, Luxembourg, Netherlands,
   Portugal, Spain; outside eurozone: Andorra, Monaco, San Marino, Vatican
   City, Montenegro, Kosovo, French Guiana, Réunion, Saint-Pierre et
   Miquelon, Guadeloupe, Martinique, Mayotte. Slovenia is scheduled to
   join the euro zone in January 2007.
   Inflation 1.8%
   Source European Central Bank, September 2006
   Method HICP
   Pegged by BAM, BGN, CVE, KMF, XPF, XOF, XAF, EEK, LTL, LVL, MTL
   Subunit
   1/100 cent
   actual usage varies depending on language
   Symbol €
   Plural See Linguistic issues concerning the euro
   cent See article
   Coins
   Freq. used 1, 2, 5, 10, 20, 50 cents, €1, €2
   unless otherwise stated as rarely used
   Rarely used 1 and 2 cents (only in Finland and the Netherlands)
   Banknotes
   Freq. used €5, €10, €20, €50
   Rarely used €100, €200, €500
   Central bank European Central Bank
   Website www.ecb.eu
   Printer Istituto Poligrafico e Zecca dello Stato
   Banco de Portugal
   Bank of Greece
   Banque de France
   Bundesdruckerei
   Central Bank and Financial Services Authority of Ireland
   De La Rue
   Fábrica Nacional de Moneda y Timbre
   François-Charles Oberthur
   Giesecke & Devrient
   Royal Joh. Enschedé
   National Bank of Belgium
   Österreichische Banknoten- und Sicherheitsdruck
   Setec Oy
   Website Istituto Poligrafico e Zecca dello Stato
   Banco de Portugal
   Bank of Greece
   Banque de France
   Bundesdruckerei
   Central Bank and Financial Services Authority of Ireland
   De La Rue
   Fábrica Nacional de Moneda y Timbre
   François-Charles Oberthur
   Giesecke & Devrient
   Royal Joh. Enschedé
   National Bank of Belgium
   Österreichische Banknoten- und Sicherheitsdruck
   Setec Oy

   The euro ( currency sign: €; banking code: EUR) is the official
   currency of the European Union member states of Austria, Belgium,
   Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
   Netherlands, Portugal, and Spain - also known as the Eurozone - and is
   the single currency for more than 300 million people in Europe.
   Including areas using currencies pegged to the euro, the euro affects
   more than 480 million people worldwide.

   The euro was introduced to world financial markets as an accounting
   currency in 1999 and launched as physical coins and banknotes in 2002.
   All EU member states are eligible to join if they comply with certain
   monetary requirements, and eventual use of the euro is mandatory for
   all new EU members.

   The euro is managed and administered by the Frankfurt-based European
   Central Bank (ECB) and the European System of Central Banks (ESCB)
   (composed of the central banks of its member states). As an independent
   central bank, the ECB has sole authority to set monetary policy. The
   ESCB participates in the printing, minting and distribution of notes
   and coins in all member states, and the operation of the Eurozone
   payment systems.

Characteristics of the euro

The currency sign €

   This is the official construction of the euro logo, which was specified
   to be printed in PMS Yellow on a PMS Reflex Blue background
   Enlarge
   This is the official construction of the euro logo, which was specified
   to be printed in PMS Yellow on a PMS Reflex Blue background

   A special euro currency sign (€) was designed after a public survey had
   narrowed the original ten proposals down to two. The European
   Commission then chose the final design. The eventual winner was a
   design allegedly created by a team of four experts who have not been
   officially named. The official story of the design history of the euro
   sign is disputed by Arthur Eisenmenger, a former chief graphic designer
   for the EEC, who claims to have created it as a generic symbol of
   Europe.

   The glyph is (according to the European Commission) "a combination of
   the Greek epsilon, as a sign of the weight of European civilization; an
   E for Europe; and the parallel lines crossing through standing for the
   stability of the euro".

   The European Commission also specified a euro logo with exact
   proportions and foreground/background colour tones. Although some font
   designers simply copied the exact shape of this logo as the euro sign
   in their fonts, most designed their own variants, often based upon the
   capital letter C in the respective font so that currency signs have the
   same width as Arabic numerals.

   Placement of the currency sign varies from nation to nation. While the
   official recommendation is to place it before the number (contravening
   the general ISO recommendation to place unit symbol after the number),
   people in many countries have kept the placement of their former
   currencies.

Economic and Monetary Union

    Life in the European Union
   Flag of the European Union
     * Citizenship
     * Culture
     * Demographics
     * Economy
     * Education
     * Enlargement
     * Foreign
       relations

                     * Geography
                     * History
                     * Languages
                     * Military
                     * Politics
                     * Sport
                     * Statistics

History (1990-2006)

   The euro was established by the provisions in the 1992 Maastricht
   Treaty on European Union that was used to establish an economic and
   monetary union. In order to participate in the new currency, member
   states had to meet strict criteria such as a budget deficit of less
   than three per cent of their GDP, a debt ratio of less than sixty per
   cent of GDP, low inflation, and interest rates close to the EU average.

   Economists that helped create or contributed to the euro include Robert
   Mundell, Wim Duisenberg, Robert Tollison, Neil Dowling and Tommaso
   Padoa-Schioppa. (For macro-economic theory, see below.)

   Due to differences in national conventions for rounding and significant
   digits, all conversion between the national currencies had to be
   carried out using the process of triangulation via the euro. The
   definitive values in euro of these subdivisions (which represent the
   exchange rates at which the currency entered the euro) are shown at
   right.
              Currency             Abbr.   Rate    Fixed on
   Austria Austrian schilling      ATS   13.7603  31/12/1998
   Belgium Belgian franc           BEF   40.3399  31/12/1998
   Netherlands Dutch gulden        NLG   2.20371  31/12/1998
   Finland Finnish mark            FIM   5.94573  31/12/1998
   France French franc             FRF   6.55957  31/12/1998
   Germany German mark             DEM   1.95583  31/12/1998
   Republic of Ireland Irish pound IEP   0.787564 31/12/1998
   Italy Italian lira              ITL   1936.27  31/12/1998
   Luxembourg Luxembourg franc     LUF   40.3399  31/12/1998
   Portugal Portuguese escudo      PTE   200.482  31/12/1998
   Spain Spanish peseta            ESP   166.386  31/12/1998
   Greece Greek drachma            GRD   340.750  19/06/2000

   The rates were determined by the Council of the European Union, based
   on a recommendation from the European Commission based on the market
   rates on 31 December 1998, so that one ECU ( European Currency Unit)
   would equal one euro. (The European Currency Unit was an accounting
   unit used by the EU, based on the currencies of the member states; it
   was not a currency in its own right.) These rates were set by Council
   Regulation 2866/98 (EC), of 31 December 1998. They could not be set
   earlier, because the ECU depended on the closing exchange rate of the
   non-euro currencies (principally the pound sterling) that day.

   The procedure used to fix the irrevocable conversion rate between the
   drachma and the euro was different, since the euro by then was already
   two years old. While the conversion rates for the initial eleven
   currencies were determined only hours before the euro was introduced,
   the conversion rate for the Greek drachma was fixed several months
   beforehand, in Council Regulation 1478/2000 (EC), of 19 June 2000.

   The currency was introduced in non-physical form (travellers' cheques,
   electronic transfers, banking, etc.) at midnight on 1 January 1999,
   when the national currencies of participating countries (the Eurozone)
   ceased to exist independently in that their exchange rates were locked
   at fixed rates against each other, effectively making them mere
   non-decimal subdivisions of the euro. The euro thus became the
   successor to the European Currency Unit (ECU). The notes and coins for
   the old currencies, however, continued to be used as legal tender until
   new notes and coins were introduced on 1 January 2002.

   The changeover period during which the former currencies' notes and
   coins were exchanged for those of the euro lasted about two months,
   until 28 February 2002. The official date on which the national
   currencies ceased to be legal tender varied from member state to member
   state. The earliest date was in Germany; the mark officially ceased to
   be legal tender on 31 December 2001, though the exchange period lasted
   two months. The final date was 28 February 2002, by which all national
   currencies ceased to be legal tender in their respective member states.
   However, even after the official date, they continued to be accepted by
   national central banks for several years up to forever in Austria,
   Germany, Ireland, and Spain. The earliest coins to become
   non-convertible were the Portuguese escudos, which ceased to have
   monetary value after 31 December 2002, although banknotes remain
   exchangeable until 2022.

Current Eurozone (2002-2006)

   ██ Eurozone countries ██ ERM II countries ██ other EU countries
   ██ unilaterally adopted euro
   Enlarge
   ██ Eurozone countries ██ ERM II countries ██ other EU countries
   ██ unilaterally adopted euro
     * The euro is the sole currency in Austria, Belgium, France, Finland,
       Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands,
       Portugal and Spain. These 12 countries together are frequently
       referred to as the Eurozone or the euro area, or more informally
       "euroland" or the "eurogroup". The euro is also legal currency in
       the Eurozone overseas territories of French Guiana, Réunion,
       Saint-Pierre et Miquelon, Guadeloupe, Martinique and Mayotte.

     * By virtue of some bilateral agreements the European microstates of
       Monaco, San Marino, and Vatican City mint their own euro coins on
       behalf of the European Central Bank.

     * Andorra, Montenegro and Kosovo adopted the foreign euro as their
       legal currency for movement of capital and payments without
       participation in the ESCB or the right to mint coins. Andorra is in
       the process of entering a monetary agreement similar to Monaco, San
       Marino, and Vatican City.

Future prospects (2007-)

Pre-2004 EU members

   From the launch of the euro in 1999 until the EU enlargement in 2004,
   Denmark, Sweden and the United Kingdom were the only EU member states
   outside the monetary union. The situation for the three older member
   states also looks different from that of the ten new EU members; all
   three have no clear roadmap for adopting the euro:
     * Sweden: According to the 1995 accession treaty (approved by
       referendum), Sweden is required to join the euro and therefore must
       convert to the euro at some point. Notwithstanding this, on 14
       September 2003, a consultative Swedish referendum was held on the
       euro, the result of which was 55.9% against adopting the common
       currency versus 42.0% in favour. The Swedish government has argued
       that such a line of action is possible since one of the
       requirements for Eurozone membership is a prior two-year membership
       of the ERM II. By simply choosing to stay outside the exchange rate
       mechanism, the Swedish government is provided a formal loophole
       avoiding the theoretical requirement of adopting the euro. Some of
       Sweden's major parties continue to believe that it would be in the
       national interest to join, but they have all pledged to abide by
       the results for the time being and show no interest in raising the
       issue again.

     * The United Kingdom's eurosceptics believe that the single currency
       is merely a stepping stone to the formation of a unified European
       superstate, and that removing United Kingdom's ability to set its
       own interest rates will have detrimental effects on its economy.
       Others in the UK, usually joined by eurosceptics, advance several
       economic arguments against membership: the most cited one concerns
       the large unfunded pension liabilities of many continental European
       governments (unlike in the UK) which would, with a greying
       population, depress the currency in the future against the United
       Kingdom's interests. The contrary view is that, since
       intra-European exports make up to 50% of the United Kingdom's
       total, it eases the Single Market by removing currency risk,
       although financial derivatives are becoming more accessible to
       small UK businesses thereby allowing businesses to offset this
       risk. An interesting parallel can be seen in the 19th century
       discussions concerning the possibility of the United Kingdom
       joining the Latin Monetary Union . Many British people also simply
       like Sterling as a currency as it is part of UK heritage. The UK
       government has set five economic tests that must be passed before
       it can recommend that the United Kingdom join the euro; however,
       given the relatively subjective nature of these tests it seems
       unlikely that they would be held to be fulfilled whilst public
       opinion remains so strongly against participation. In November
       1999, in preparation for the introduction of the euro notes and
       coins across the eurozone, the European Central Bank announced as
       policy a total ban on the issuing of banknotes by entities that
       were not National Central Banks ('Legal Protection of Banknotes in
       the European Union Member States'). Unless a derogation could be
       negotiated by the UK as a condition of entering the eurozone, a
       change from Sterling to the euro would mean an immediate end to the
       circulation of Scottish and Northern Irish banknotes (see Sterling
       banknotes). The ECB have also stated that even with the central
       bank issued notes, there is 'no room for exclusively national
       arrangements' - all notes must be produced to the central designs.
       National variation is allowed in the design of euro coins, and it
       is possible that the Royal Mint could continue to include the
       symbols of the home nations on the British designed coinage,
       although this would have to be included in place of the Queen's
       portrait. The position of the Crown Dependencies is less clear. The
       European Union has so far strongly resisted attempts to issue
       euro-equivalent notes by non-EU states unless steps are taken to
       enter into a suitable monetary agreement, including the adoption of
       EU banking and finance regulations (see Andorran euro coins).

     * Denmark negotiated a number of opt-out clauses from the Maastricht
       treaty after it had been rejected in a first referendum. On 28
       September 2000, another referendum was held in Denmark regarding
       the euro resulting in a 53.2% vote against joining. However, Danish
       politicians have suggested that debate on abolishing the four
       opt-out clauses may possibly be re-opened in 2006. In addition,
       Denmark has pegged its krone to the euro (€1 = DKr7.460,38 ± 2.25%)
       as the krone remains in the ERM.

Post-2004 EU members

   In 2004 the 10 new EU member states had a currency other than the euro;
   however, those countries are required by their Accession Treaties to
   join the euro. Some of the following countries have already joined the
   European Exchange Rate Mechanism, ERM II. They and the others have set
   themselves the goal to join the euro ( EMU III) as follows:
            Currency           Abbr.   Rate    Fixed in
   Slovenia Slovenian tolar    SIT   239.640  2007-01-01
            Currency           Abbr.   Rate   Conv goal
   Cyprus Cypriot pound        CYP   0.585274 2008-01-01
   Estonia Estonian kroon      EEK   15.6466  2008-01-01
   Latvia Latvian lats         LVL   0.702804 2008-01-01
   Malta Maltese lira          MTL   0.429300 2008-01-01
   Bulgaria Bulgarian lev      BGN   1.95583  2010-01-01
   Slovakia Slovak koruna      SKK   38.4550  2009-01-01
   Lithuania Lithuanian litas  LTL   3.45280  2009-01-01
   Czech Republic Czech koruna CZK   --       2010-
   Hungary Hungarian forint    HUF   --       2010-
   Poland Polish złoty         PLN   --       2011-
   Romania Romanian leu        RON   --       2011-
     * 1 January 2007 for Slovenia. Date confirmed and finalised by the
       European Commission, conversion rate 239.640. The final exchange
       rate was finalised on 2006- 07-11. However, the finalised rate will
       not be effective until 2007- 01-01.
     * 1 January 2008 for Cyprus, Estonia, Latvia and Malta
     * 1 January 2009 for Slovakia and Lithuania
     * 1 January 2010 for Bulgaria and the Czech Republic.
     * 2011 or later for Hungary, Poland and Romania

   Too high an inflation rate postponed the entry of Lithuania as planned
   on 1 January 2007. Some of these currencies do not float against euro,
   and a subset of those even were unilaterally pegged with euro before
   joining ERM II. See European Exchange Rate Mechanism, currencies
   related to the euro, and individual currency articles for more details.

   Cyprus, Estonia, Latvia, Lithuania, Malta, Slovakia and Slovenia have
   already finalised the design for the country's coins' obverse side.

   Bulgaria and Romania are not yet members of the EU, but are scheduled
   to enter on January 1, 2007.

Public opinion on secession from the euro

   Although the failure of the European Constitution to be ratified would
   have no direct impact on the status of the euro, some debate regarding
   the euro arose after the negative outcome of the French and Dutch
   referenda in mid 2005.
     * A poll by Stern magazine released 1 June 2005 found that 56% of
       Germans would favour a return to the mark.
     * Members of the Northern League northern Italian separatist
       political party have discussed calling a referendum to return Italy
       to the lira.
     * Members of the far-right nationalist Movement for France political
       party have proposed holding a referendum to return France to the
       franc.
     * In contrast to Germany, a poll in Austria on 7 June 2005 showed the
       overwhelming support of the euro as 73% of the sample said they
       preferred to keep the common currency with only 21% in favour of
       returning to the old currency, the Schilling.
     * Soon after these suggestions were made, the European Commission
       issued a statement denying any possibility of this, stating "the
       euro is here to stay".

   More recently, in April 2006, after the Italian elections, the subject
   once again came up. Again, the EU strongly refuted this, calling the
   suggestion "impossible".

The Economics of the Euro

Optimal Currency Areas

   The euro Light Sculpture in Frankfurt
   Enlarge
   The euro Light Sculpture in Frankfurt

   In economic theory the degree of fullfillment of the following four
   criteria indicate whether an area is optimal for a monetary union.
   These criteria are often called the optimum currency area (OCA)
   criteria. Although these criteria are not exhaustive and far from
   absolute, they are generally accepted as a reasonable metric to
   establish an OCA. There are three economic criteria (labour and capital
   mobility, product diversification, and openness) and one political
   criterion (fiscal transfers). Since establishing a single currency over
   a region necessitates surrendering the ability to tailor monetary
   policy to specific local conditions, these four characteristics measure
   the ability of the economy to smooth local economic movements in the
   absence of monetary policy.
     * Robert A. Mundell formulated the idea that perfect capital and
       labour mobility would mitigate the adverse consequences of
       asymmetric shocks in a currency area. While capital is quite mobile
       in the Eurozone, labour mobility is relatively low, especially when
       compared to the U.S. and Japan.

     * Peter Kenen formulated the idea that widely diversified production
       and export structures that are similar between the areas that form
       the currency area lower the effect and probability of asymmetric
       shocks. The Eurozone scores quite well on this criterion, and
       monetary integration seems to further improve the diversification
       of production structures.

     * Ronald McKinnon formulated the idea that areas which are very open
       to trade and trade heavily with each other form an optimum currency
       area. This is because the high trade intensity will lower the
       significance of the distinction between domestic and foreign goods
       as competition will equalize the prices of most goods,
       independently of exchange rates. The Eurozone members trade heavily
       with each other (intra-European trade is greater than international
       trade), and all evidence so far seems to indicate that the monetary
       union has at least doubled trade between members.

     * The term " fiscal transfers" refers to the transfer of money
       between areas. Regions that are economically worse off or suffer
       from negative economic shocks receive money, creating a counter
       cyclical effect that lowers the price, wage, and unemployment
       differentials between regions. Theoretically, Europe has no-bail
       out clause in the Stability and Growth Pact, meaning that fiscal
       transfers are not allowed, but it's impossible to know what will
       happen in practice.

   So as the Eurozone has a single monetary policy and a single interest
   rate set by the ECB, it cannot be fine-tuned for the economic situation
   in each individual country. While Europe scores well on some of the
   measures characterizing an OCA, it has lower labour mobility than the
   United States and similarly cannot rely on Fiscal federalism to smooth
   out regional economic disturbances.

Transaction costs and risks

   The most obvious benefit of adopting a single currency is removing from
   trade the cost of exchanging currency, theoretically allowing
   businesses and individuals to consummate previously unprofitable
   trades. On the consumer side, banks in the Eurozone must charge the
   same for intra-member cross-border transactions as purely domestic
   transactions for electronic payments (e.g. credit cards, debit cards
   and cash machine withdrawals).

   The absence of distinct currencies also removes exchange rate risks.
   The risk of unanticipated exchange rate movement has always added an
   additional risk or uncertainty for companies or individuals looking to
   invest or trade outside their own currency zones. Companies that hedge
   against this risk will no longer need to shoulder this additional cost.
   The reduction in risk is particularly important for countries whose
   currencies have traditionally fluctuated a great deal, particularly the
   Mediterranean nations.

   Financial markets on the continent are expected to be far more liquid
   and flexible than they were in the past. The reduction in cross-border
   transaction costs will allow larger banking firms to provide a wider
   array of banking services that can compete across and beyond the
   Eurozone.

Price parity

   Another effect of the common European currency is that differences in
   prices — in particular in price levels — should decrease because of the
   Law of one price. Differences in prices can trigger arbitrage, i.e.
   speculative trade in a commodity between countries purely to exploit
   the price differential, which will tend to equalise prices across the
   euro area. Similarly, price transparency across borders should help
   consumers find lower cost goods or services. In reality, the effects of
   the euro over the level of the prices in Europe is disputable. Many
   citizens cite the strong increase in prices in the years after the
   introduction of the euro, although numerous empirical studies have
   failed to find much real evidence of this. It is speculated that the
   reason for this perception is that the prices of small, everyday items
   were rounded up significantly. For example, a cup of coffee that once
   cost two German mark might now cost €1.50 or even €2.00 - a 50-100%
   increase. At the same time, a large appliance or rent payment rounded
   up to the next obvious euro level would be a negligible proportional
   increase. The fact that the prices people see every day were affected
   more strongly might explain why so many people perceive the "euro
   effect" as being significant, while official studies — which look at
   the breadth of expenditures, in proportion — would downplay it.

Macroeconomic stability

   Low levels of inflation are the hallmark of stable and modern
   economies. Because a high level of inflation acts as a highly
   regressive tax ( Seigniorage) and theoretically discourages investment,
   it is generally viewed as undesirable. In spite of the downside, many
   countries have been unable or unwilling to deal with serious
   inflationary pressures. Some countries have successfully contained by
   establishing largely independent central banks. One such bank was the
   Bundesbank in Germany; as the European Central Bank is modeled on the
   Bundesbank, it is independent of the pressures of national governments
   and has a mandate to keep inflationary pressures low. Member countries
   join the bank to credibly commit to lower inflation, hoping to enjoy
   the macroeconomic stability associated with low levels of expected
   inflation. The ECB (unlike the Federal Reserve in the United States of
   America) does not have a second objective to sustain growth and
   employment.

   National and corporate bonds denominated in euro are significantly more
   liquid and have lower interest rates than was historically the case
   when denominated in legacy currency. While increased liquidity may
   lower the nominal interest rate on the bond, denominating the bond in a
   currency with low levels of inflation arguably plays a much larger
   role. A credible commitment to low levels of inflation and a stable
   reduces the risk that the value of the debt will be eroded by higher
   levels of inflation or default in the future, allowing debt to be
   issued at a lower nominal interest rate.

A new reserve currency

   The euro is widely perceived to be one of two, or perhaps three, major
   global reserve currencies, making inroads on the widely used U.S.
   dollar (USD), which has historically been used by commercial and
   central banks world-wide as a stable reserve on which to ensure their
   liquidity and facilitate international transactions. A currency is
   attractive for foreign transactions when it demonstrates a proven track
   record of stability, a well-developed financial market to dispose of
   the currency in, and proven acceptability to others. While the euro has
   made substantial progress toward achieving these features, there are a
   few challenges that undermine the ascension of the euro as a major
   reserve currency. Persistent excessive budget deficits of member
   nations, economically weak new members, and serious questions regarding
   expansion threaten the place of the new currency.

   As a new reserve currency, government sponsoring the euro do receive
   some substantial benefits. Since money is effectively an interest free
   loan to the government by the holder of the currency — foreign reserves
   act as subsidy to the country minting the currency (see Seigniorage).

Criticism

   Some European nationalist parties oppose the euro as part of a more
   general opposition to the principle of a European union. A significant
   group of these include the members of the Independence and Democracy
   bloc in the European Parliament. Additionally the Green Party of
   England and Wales is opposed for anti-globalisation reasons but their
   stance is not shared by rest of the European Green Party bloc in the
   European Parliament.

   In their view, the countries that participate in the EMU have
   surrendered their sovereign abilities to conduct monetary policy. The
   European Central Bank is required to pursue a policy that might be at
   odds with national interests and there is no guarantee of
   extra-national assistance from their more fortunate neighbors should
   local conditions necessitate some sort of economic stimulus package.
   Many critics of the EMU believe the benefits to joining the
   organization are outweighed by the loss of sovereignty over local
   policy that accompanies membership.

Euro exchange rate

Flexible exchange rates

   The ECB targets interest rates rather than exchange rates and in
   general does not intervene on the foreign exchange rate markets,
   because of the implications of the Mundell-Fleming Model, being the
   fact that a central bank can not maintain an interest rate target and
   an exchange rate target simultaneously, as increasing the money supply
   would result in a depreciation of the currency. In the years following
   the Single European Act, the EU has liberalized its capital markets,
   and as the ECB has chosen for monetary autonomy, the exchange rate
   regime of the euro is flexible, or floating. This explains why the
   exchange rate of the euro vis-à-vis other currencies is characterized
   by strong fluctuations. Most notable are the fluctuations of the euro
   vs. the U.S. dollar, another freely floating currency. However this
   focus on the dollar-euro parity is partly subjective. It is taken as a
   reference because the European authorities expect the euro to compete
   with the dollar. The effect of this selective reference is misleading,
   as it give to the observers the impression that a rise in the value of
   the euro vs the dollar is the effect of an increased global strength of
   the euro, while it may be the effect of an intrinsic weakening of the
   dollar itself.

Against other major currencies

   Exchange rate evolution of the euro compared to USD, JPY and GBP.
   Exchange rate at start is put to 1. Green: in Jan-1999: 1 € = 1.18
   USD ; in May-2006: 1 € = 1.28 USD Red: in Jan-1999: 1 € = 133 JPY ; in
   May-2006: 1 € = 144 JPY Blue: in Jan-1999: 1 € = 0.71 GBP ; in
   May-2006: 1 € = 0.68 GBP
   Enlarge
   Exchange rate evolution of the euro compared to USD, JPY and GBP.
   Exchange rate at start is put to 1.
   Green: in Jan-1999: 1 € = 1.18 USD ; in May-2006: 1 € = 1.28 USD
   Red: in Jan-1999: 1 € = 133 JPY ; in May-2006: 1 € = 144 JPY
   Blue: in Jan-1999: 1 € = 0.71 GBP ; in May-2006: 1 € = 0.68 GBP

   After the introduction of the euro, its exchange rate against other
   currencies, especially the U.S. dollar, declined heavily. At its
   introduction in 1999, the euro was traded at US$1.18; on 26 October
   2000, it fell to an all time low of $0.8228 per euro. It then began
   what at the time was thought to be a recovery; by the beginning of 2001
   it had risen to nearly $0.96. It declined again, although less than
   previously, reaching a low of $0.8344 on 6 July 2001 before commencing
   a steady appreciation. The two currencies reached parity on 15 July
   2002, and by the end of 2002 the euro had reached $1.04 as it climbed
   further.

   On 23 May 2003, the euro surpassed its initial ($1.18=€1.00) trading
   value for the first time. At the end of 2004, it had reached a peak of
   $1.3668 per euro (€0.7316 per $) as the U.S. dollar fell against all
   major currencies, fuelled by the so called twin deficit of the US
   accounts. Although the US trade imbalances are heavily against East
   Asia rather than Europe, East Asia's reluctance to let their currencies
   rise has led to the euro's rising in its place. However, the dollar
   recovered in 2005, rising to $1.18 per euro (€0.85 per dollar) in July
   2005 (and stable throughout the second half of 2005). The fast increase
   in U.S. interest rates during 2005 had much to do with this trend.

   By mid-2006, the euro had risen to $1.28. On 2006- 11-24, the euro hit
   a 19-month high against the US dollar, reaching $1.3109 to the euro.
     * Current and historical exchange rates against 29 other currencies
       (European Central Bank)
     * Current dollar/euro exchange rates (BBC)
     * Historical exchange rate from 1971 until now
     * Currency Converter

Currencies pegged to the euro

   There are a number of foreign currencies that were pegged to a European
   currency and are now currencies related to the euro: the Cape Verdean
   escudo, the Bosnia and Herzegovina convertible mark, the Bulgarian lev,
   the CFP franc, the CFA franc and the Comorian franc.

   In total, the euro is the official currency in 16 states inside the
   European Union, 2 state/territory outside the European Union. In
   addition, 25 states and territories have currencies that are directly
   pegged to the euro including 14 countries in mainland Africa, 4 EU
   members that will ultimately join the euro, 3 French Pacific
   territories, 2 African island countries and 2 Balkan countries.
   Current EUR exchange rates
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Name and linguistic issues

   Several linguistic issues have arisen in relation to the spelling of
   the words euro and cent in the many languages of the member states of
   the European Union, as well as in relation to grammar and the formation
   of plurals. However, in each country but Greece, which uses λεπτό and
   λεπτά on its coins, the form "cent" is officially required to be used
   in legislation in both the singular and in the plural. Immutable word
   formations have been encouraged by the European Commission in usage
   with official EU legislation (originally in order to ensure uniform
   presentation on the banknotes), but the "unofficial" practice
   concerning the mutability (or not) of the words differs between the
   member states and their languages. The subject has led to much debate
   and controversy.

   Retrieved from " http://en.wikipedia.org/wiki/Euro"
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   with only minor checks and changes (see www.wikipedia.org for details
   of authors and sources) and is available under the GNU Free
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