History of the Euro

Birth of the European Monetary System
It was the economic crisis of the 1970s that led to the first plans for a single currency. The system of fixed exchange rates pegged to the US dollar was abandoned. European leaders agreed to create a "currency snake", tying together European currencies. But the system immediately came under pressure from the strong dollar, causing problems for some of the weaker European economies.')" onMouseOut="changerollOver('History of the Euro
Twelve of the 15 EU countries (Germany, France, Italy, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Austria, Finland, Greece and Ireland) are members of the eurozone. On 1 January 2002 euro cash replaces the old national currencies. As the chart shows, European currencies have always fluctuated against the dollar, even as debates have raged about the euro.')"> Plaza Accord
In the 1980s the dollar strengthened dramatically. US interest rates were very high. The cause was a dispute between the Reagan administration and the US central bank over the size of the budget deficit. In 1986 the world\'s leading industrial countries agreed to act and lower the value of the dollar. The successful deal was struck at New York\'s Plaza hotel.')" onMouseOut="changerollOver('History of the Euro
Twelve of the 15 EU countries (Germany, France, Italy, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Austria, Finland, Greece and Ireland) are members of the eurozone. On 1 January 2002 euro cash replaces the old national currencies. As the chart shows, European currencies have always fluctuated against the dollar, even as debates have raged about the euro.')"> Maastricht Treaty
In 1991 the 15 members of the European Union, meeting in the Dutch town of Maastricht, agreed to set up a single currency as part of a drive towards Economic and Monetary Union. There were strict criteria for joining, including targets for inflation, interest rates and budget deficits. A European Central Bank was established to set interest rates. Britain and Denmark opted out of these plans.')" onMouseOut="changerollOver('History of the Euro
Twelve of the 15 EU countries (Germany, France, Italy, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Austria, Finland, Greece and Ireland) are members of the eurozone. On 1 January 2002 euro cash replaces the old national currencies. As the chart shows, European currencies have always fluctuated against the dollar, even as debates have raged about the euro.')"> ERM crisis
The Exchange Rate Mechanism - established in 1979 - was used to keep the value of European currencies stable. But fears that voters might reject the Maastricht treaty led currency speculators to target the weaker currencies. In September 1992 the UK and other EU countries were forced to devalue. Only the French franc was successfully defended against the speculators.')" onMouseOut="changerollOver('History of the Euro
Twelve of the 15 EU countries (Germany, France, Italy, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Austria, Finland, Greece and Ireland) are members of the eurozone. On 1 January 2002 euro cash replaces the old national currencies. As the chart shows, European currencies have always fluctuated against the dollar, even as debates have raged about the euro.')"> Asian crisis
The turbulence in the Asian currency markets began in July 1997 in Thailand and quickly spread throughout the main Asian economies, eventually reaching economies as far away as Russia and Brazil. Foreign lenders withdrew their funds amid fears of a global financial meltdown, and the dollar strengthened. Many EU countries were struggling to cut their budget deficits to meet the criteria for euro membership.')" onMouseOut="changerollOver('History of the Euro
Twelve of the 15 EU countries (Germany, France, Italy, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Austria, Finland, Greece and Ireland) are members of the eurozone. On 1 January 2002 euro cash replaces the old national currencies. As the chart shows, European currencies have always fluctuated against the dollar, even as debates have raged about the euro.')"> Euro launch
The euro was launched on 1 January 1999 as an electronic currency used by banks, foreign exchange dealers, big firms and stock markets. The new European Central Bank set interest rates across the eurozone. But uncertainty about its policy and public disagreements among member governments weakened the value of the euro on foreign exchange markets.')" onMouseOut="changerollOver('History of the Euro
Twelve of the 15 EU countries (Germany, France, Italy, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Austria, Finland, Greece and Ireland) are members of the eurozone. On 1 January 2002 euro cash replaces the old national currencies. As the chart shows, European currencies have always fluctuated against the dollar, even as debates have raged about the euro.')"> Central Bank intervention
After just 20 months the euro had lost nearly 30% in value against the dollar. The European Central Bank and other central banks finally joined forces to boost its value. The move helped put a floor under the euro - but it has still not recovered its value. A weak euro helped European exports, but undermined the credibility of the currency and fueled inflationary pressures.')" onMouseOut="changerollOver('History of the Euro
Twelve of the 15 EU countries (Germany, France, Italy, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Austria, Finland, Greece and Ireland) are members of the eurozone. On 1 January 2002 euro cash replaces the old national currencies. As the chart shows, European currencies have always fluctuated against the dollar, even as debates have raged about the euro.')"> Terrorist Attack
The terrorist attack in New York, aimed at damaging the world\'s leading financial centre, severely tested currency markets. Money flowed out of the dollar, to safe havens like the Swiss franc and - for the first time - the euro. Central banks tried to calm the markets and cut interest rates across the globe. Many observers believe it may have marked the coming of age of the euro as an international currency.')" onMouseOut="changerollOver('History of the Euro
Twelve of the 15 EU countries (Germany, France, Italy, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Austria, Finland, Greece and Ireland) are members of the eurozone. On 1 January 2002 euro cash replaces the old national currencies. As the chart shows, European currencies have always fluctuated against the dollar, even as debates have raged about the euro.')"> Euro becomes cash currency
On 1 January 2002 the euro became a reality for 300m citizens of the 12 countries in the eurozone. The arrival of the euro as a cash currency may foster closer integration and greater price competition within the eurozone. It may also help boost its international role, as the doubts grow over the stength of the dollar as the US economy continued to slow.')" onMouseOut="changerollOver('Birth of the European Monetary System
It was the economic crisis of the 1970s that led to the first plans for a single currency. The system of fixed exchange rates pegged to the US dollar was abandoned. European leaders agreed to create a "currency snake", tying together European currencies. But the system immediately came under pressure from the strong dollar, causing problems for some of the weaker European economies.')">

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The euro was launched on 1 January 1999 as an electronic currency and became legal tender on 1 January 2002, but attempts to create a single currency go back 20 years. This chart shows the value of the euro (before 1999 as a basket of the 11 legacy currencies) against the US dollar.

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		History of the Euro Twelve of the 15 EU countries (Germany, France, Italy, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Austria, Finland, Greece and Ireland) are members of the eurozone. On 1 January 2002 the euro replaced the old national currencies. As the chart shows, European currencies have always fluctuated against the dollar, even as debates have raged about the euro.




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