January 4, 1999 marks the first time Europe has bonded using a common currency since the reign of Charlemagne in the ninth century. The “euro” became the financial unit in investment and corporate markets. Representing around 290 million people, eleven European Union (EU) nations start the use of this currency with the goal of adding European growth and integration; the nations include Spain, Austria, Portugal, Belgium, the Netherlands, Finland, Luxembourg, Germany, Italy, France and Ireland.
The euro guaranteed to give the dollar a run for its cash in the just launched global economy as it closed on its’ first day at 1.17 dollars. Decorated with pictures of architecture, symbols of European member-state motifs and unity, it went into circulation on January 1st, 2002. This would take over the other types of prior currency that were used such as: the Portugal escudo and Spanish peseta, the Austrian schilling, Netherlands guilder, Belgian franc, Luxembourg franc, Finnish markka, Irish punt, French franc, Italian Lira and the German mark. Other non-EU nations and other territories adopted the use of the euro that includes the Vatican City and Monaco.
Controversy over converting to the euro did exist even though using a common currency did have practical benefits to it. Obviously, travel and business would make things easier throughout Europe; however, concerns were justified regarding if the process of changing over could be chaotic and costly which may cause individual nations to have trouble maintaining control regarding economic policies, counterfeiting may be encouraged and could end up causing inflation. The nations that declared they would pass on using the euro were Denmark, Great Britain and Sweden. Although initially being held back from converting to the common currency due to being unable to qualify for all of the mandated conditions, Greece was allowed to in January of 2001 adopt using the euro; they would become the 12th participant of the so-called euro zone.
The Maastricht Treaty on the European Union in 1992 helped create the euro and listed the exact economic requirements; this included low inflation and high degree of price stability that countries must establish prior to being given permission to use the new currency. The euro is made up of 7 paper bills and 8 coins in which the euro is managed by the Frankfurt-based European Central Bank (ECB) while setting other monetary policies such as interest rates.
Ten more countries joined the EU in 2004 which include: Slovenia, Cyprus, Slovakia, Czech Republic, Poland, Estonia, Malta, Hungary, Lithuania and Latvia. While in 2007 some of these countries will start to use the euro, the coming years will 4see the rest using it as well.