Europeans and the EURO

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Europeans and the EURO - A New Era

Monetary Union represents a major step forward in the building of Europe and one of the most ambitious collective projects at the tail-end of this century. All European citizens should be fully aware of the extent of the change taking place, a change which goes far beyond the framework of the financial markets alone. Today’s presentation, which is aimed not at the experts but at the future users of the Euro, that is, all of us, offers an excellent opportunity for highlighting the impact of Euro.

From the very first day of this year something amazing happened in Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. From January 1, these 11 countries have a single currency, the Euro. A currency that will be the only one used among the European Union. The first person who had the idea of creating a single currency for his country was the Roman Emperor, Diocletian back in 300 AD. He established a primitive gold standard and set up a coin that was used throughout the realm. After many centuries passed, in 1958 the European Economic Community was formed having as an objective the monetary unification. But the year that the final agreement was signed, was 1992 in the Maastricht Treaty of the European Union, which points to the introduction of a single European currency in 1999.

The Euro is the name of the single currency of the European Community. Essentially the Euro is the ECU renamed, since ECU’s will be exchangeable one-for-one for new EUROS. The ECU is currently the basis for the European Monetary System. ECU stands for European Currency Unit, but is pronounced “EK-you”, after the name of an old French coin with an equivalent spelling. The ECU is defined in terms of pieces of European currencies, making it a composite currency in origination since its creation it has become a currency of denomination for eurobonds and bank certificates of deposits, among many other uses.

But some of you will start wondering why do we need the Euro? Well, the answer is obvious. Europe’s economy is now built on a single market and the single market will work much better with a single currency. Just imagine a situation in USA, for example, with every state having its own currency! Total chaos.

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