Business Glossary

common currency adopted originally by 11 European nations starting January 1, 1999. The first to adopt the Euro were: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. On that date, the conversion rates of the participating currencies were irrevocably fixed, both among themselves and against the Euro. In January 2001, Greece became the twelfth country to adopt the Euro, and the currency is also used officially or informally in a number of other countries and territories. At first, the Euro was used in financial markets by companies and governments issuing bonds and by banks issuing credit cards. Starting January 1, 2002, the Euro went into circulation and replaced all national currencies of the participating countries. Dual circulation ended on February 28, 2002. Euro notes are issued in denominations of 5, 10, 20, 50, 100, 200, and 500 Euro. There are eight different coins ranging from one cent (one hundredth of a Euro) to 2 Euro. The Euro replaced he ECU (European Currency Unit) on January 1, 1999.

common currency of the european community nations. The Euro was officially adopted on January 1, 1999 by 11 European nations-Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain, followed by Greece in 2001. On its debut as the common currency in the European Monetary Union (EMU) group of nations, the Euro replaced the European Currency Unit (ECU) and the initial value of the Euro was fixed at a one-to-one equivalence with the ECU. Euro-denominated currency and coins went into circulation on January 1, 2002, replacing all national currencies.

During the conversion period, which began in 1999, the conversion rates of participating currencies are irrevocably fixed, both among themselves, and against the Euro. There are seven denominations of Euro notes (5, 10, 20, 50, 100, 200 and 500 Euro) and eight different coins, ranging from one cent (one hundredth of a Euro) to 2 Euro.

The common currency was adopted by the Maastricht Treaty on European Union, signed in Maastricht, the Netherlands, in 1992 and ratified in 1993 by the parliaments of the member nations. Public referendums approved the treaty in some countries. The economic rationale behind the Euro was that a single currency would promote cross-border trade within Europe and international trade with the rest of the world. Converting to a single currency also helps companies cut costs and promotes a more efficient banking system because businesses would no longer have to conduct business in several different currencies.

The European countries converting to the Euro qualified by meeting a series of economic conditions, known as the convergence criteria as certified by the European Commission in 1998.

-inflation cannot exceed more than 1.5% of the inflation rate of the three best performing countries.

-budget deficit targets must fall within 3% of gross domestic product (GDP) and government debt below a reference value of 60% debt-to-GDP ratio.

-currency exchange rates are to stay within the normal fluctuation margin (currency bands) of the European Monetary System (EMS) for at least two years.

the common European currency introduced in 1999 and intended to replace national currencies in Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. More information about the European currency is available from the European Union at www.europa.eu.int and the European Central Bank, which manages the currency, at www.ecb.int.

The Euro symbol is shown in Figure 96. In Windows, this can be typed by holding down Alt and typing 0128 on the numeric keypad. However, to display and print this symbol, users of versions prior to Windows 2000 may need to download updated fonts from www.microsoft.com.

the official currency of the European Union recognized as the sole currency in 13 members of the EU (Austria, Belgium, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia, and Spain). In the United Kingdom, Sweden, and Denmark, the euro is accepted in addition to local currency. It is also used in foreign territories of EU member countries and some small nonmember European countries. Nations joining the EU after 2004 are scheduled to adopt the euro between 2007 and 2011. The supply of euros in circulation is controlled by the European Central Bank .