Chronology

1923

The Austrian Count Coudenhove Kalergi founded the Movement Pan-Europe

1926

First Paneuropean Congress, held in Vienna.

1929

Aristide Briand, French prime minister, called for a federation of European

nations in a celebrated speech in the presence of League of Nations Assembly.

1946

Winston Churchill calls for a United States of Europe in a speech given at the
Zurich University.

The European Federalists Union is established in Paris.

1948

The Organization for European Economic co-operation (OEEC) was established

to administer and organize the delivery of the Plan Marshal's massive economic
aid.

The International Co-ordination of Movements for the Unification of Europe

Committee, chaired by Winston Churchill, meets in the Hague.

1949

Foundation of the NATO.

1950

Schuman Declaration

In a speech inspired by Jean Monnet, Robert Schuman, the French Foreign

Minister, proposes that France and Germany and any other European country
wishing to join them pool their Coal and Steel resources

1951
A meeting to consider the creation of a European Community of Defence is held
in Paris. Belgium, France, Italy, Luxembourg and Germany attend the meeting
alongside six observer countries - the United States, Canada, Denmark, the
Netherlands and the United Kingdom.

The Treaty of Paris, establishing the European Coal and Steel Community
(ECSC), is signed.

1952

The Six (Belgium, France, Germany, Italy, Luxembourg, Netherlands) sign in

Paris the European Defence Community (EDC) Treaty

The ECSC Treaty enters into force. Jean Monnet is appointed President of the
High Authority.

1955

The Council of Europe adopts as it emblem the blue flag with 12 golden stars on
it.

1957

The treaties establishing the European Economic Community (EEC) and the
European Atomic Energy Community (Euratom) are signed by Belgium, France,
Germany, Italy, Luxembourg, Netherlands in Rome - from then on referred to as
the Treaty of Rome.

1958

A conference held in Stresa (Italy) lays down the basis of a common agricultural
policy (CAP).

The European Court of Justice is set up in Luxembourg.

1959

Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United

Kingdom, decide to establish a European Free Trade Association (EFTA).

1960

The Organisation for European Economic Cooperation (OEEC) becomes the

Organisation for Economic Cooperation and Development (OECD).
1963

French President General Charles de Gaulle doubts the political will of the United
Kingdom to join the community - giving rise to his famous "non" to British
membership of the EEC.

1966

Luxembourg Compromise. France, after operating an "empty chair" policy for

seven months, resumes its place in the Council in return for retention of the
unanimity vote when major interests are at stake.

1967

The United Kingdom re-applies to join the Community, followed by Ireland, and
Denmark. General de Gaulle is still reluctant to accept British accession.

1972

Denmark, Ireland, and the United Kingdom sign the treaties of accession to the
European Communities.

A referendum is held in Norway on the country joining the European

Communities. The majority is unfavourable to accession.

1975

At a meeting of the European Council in Rome, ministers decide to establish a

European Parliament elected by universal suffrage.

1979

Spanish accession negotiations formally open in Brussels.

The European Monetary System enters into force.

The first elections to the European Parliament by direct universal suffrage are
held.

1981

Greece joins the European Communities.

1984
The draft Treaty on the establishment of the European Union (Spinelli draft) is
passed by the European Parliament by a large majority.

1985

The new Commission takes office with Jacques Delors, a Frenchman, as its
President.

The Schengen Agreement on the elimination of border controls is signed by

Belgium, Germany, France, Luxembourg and the Netherlands in Schengen
(Luxembourg).

1986

The Single European Act, modifying the Treaty of Rome and extending majority
voting, is signed.

Spain and Portugal join the European Communities.

1988

Margaret Thatcher gave a eurosceptic speech at the College of Europe in Bruges

(Belgium).

1989

The fall of the Berlin Wall.

1991

The collapse of communism peaked in 1991 with the Soviet Union break-up.

The disintegration of Yugoslavia brought the war again to our continent.

A European Council Summit is held in Maastricht. It reaches an agreement on

the draft treaty on the European monetary union.

1992

The Treaty on the European Union is signed in Maastricht by the Foreign and
Finance Ministers of the Member States.

1994

The Norwegian referendum rejects accession to the European Union.

1995

Austria, Finland and Sweden become members of the European Union.

1997

The Treaty of Amsterdam was signed by the Foreign Ministers of the fifteen
member countries of the European Union.

The European Council meets in Amsterdam and reaches a consensus on a draft

treaty for a new phase of economic and monetary union and adopts a resolution
on growth and employment.

1999

The single currency, the euro, was launched on 1 January. Eleven member
states adopted the new currency but three countries - Denmark, Sweden, and
the UK - decided to defer a decision. The new currency has not been a
resounding success - in its first year its value fell by about 30% in relation to
other leading currencies.

The Cologne European Council adopts the first European Union common
strategy, which concerns Russia, and declarations on Kosovo and on the
strengthening of European common foreign and security policy, and designates
Mr Javier Solana Madariaga High Representative for the CFSP and Secretary-
General of the Council.

After a scathing report suggesting corruption and mismanagement in the

European Commission, all 20 commissioners and the president, Jacques Santer,
were forced to step down.

2000

The opening session of the Ministerial Intergovernemental Conferences for

accession negotiations of Malta, Romania, Slovakia, Latvia, Lithuania and
Bulgaria, is held in Brussels.

2001

Following the December 2000 European Council meeting held in Nice, France, a
new Treaty amending the Treaty on European Union and the Treaties
establishing the European Communities, is signed (Treaty of Nice).

History of the euro

From Wikipedia, the free encyclopedia
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History of the European Union

This article is part of a series

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v·d·e

The euro came into existence on 1 January 1999, although it has been a goal of the
European Union (EU) and its predecessors since the 1960s. After tough negotiations,
particularly due to opposition from the United Kingdom, the Maastricht Treaty entered
into force in 1993 with the goal of creating economic and monetary union by 1999 for all
EU states except the UK and Denmark.

In 1999 the currency was born virtually and in 2002 notes and coins began to circulate. It
rapidly took over from the former national currencies and slowly expanded behind the
rest of the EU. In 2009 the Lisbon Treaty formalised its political authority, the Euro
Group, alongside the European Central Bank.

Contents
[hide]

• 1 Development
o 1.1 Early ideas
o 1.2 Relaunch
o 1.3 Second stage
• 2 Creation
o 2.1 Launch
o 2.2 Minting
o 2.3 Change of currency
o 2.4 Aftermath
 o 2.5 Early growth
• 3 Late 2000s enlargements
o 3.1 Slovenia
o 3.2 Cyprus
o 3.3 Malta
o 3.4 Slovakia
• 4 Recession era
o 4.1 Reform
o 4.2 Estonia
• 5 Notes
• 6 References

• 7 External links

[edit] Development
[edit] Early ideas

Pierre Werner's report began the first moves towards monetary union

First ideas of an economic and monetary union in Europe were raised well before
establishing the European Communities. For example, already in the League of Nations,
Gustav Stresemann asked in 1929 for a European currency[1] against the background of an
increased economic division due to a number of new nation states in Europe after WWI.
At this time memories of the Latin Monetary Union[2] involving principally France, Italy,
Belgium and Switzerland and which, for practical purposes, had disintegrated following
the First World War, will have figured prominently in the minds of policy makers.

A first attempt to create an economic and monetary union between the members of the
European Economic Community goes back to an initiative by the European Commission
in 1969, which set out the need for "greater co-ordination of economic policies and
monetary cooperation."[3] This was followed up at a meeting of the European Council at
The Hague in December 1969. The European Council tasked Pierre Werner, Prime
Minister of Luxembourg, with finding a way to reduce currency exchange rate volatility.
His report was published in October 1970 and recommended centralisation of the national
macroeconomic policies entailing "the total and irreversible fixing of parity rates and the
complete liberation of movements of capital." But he did not propose a single currency or
central bank.[4] An attempt to limit the fluctuations of European currencies, using a snake
in the tunnel, failed.

In 1971, US President Richard Nixon removed the gold backing from the US dollar,
causing a collapse in the Bretton Woods system that managed the world's currencies. The
widespread currency floats and devaluations set back aspirations for European monetary
union.[4] However in March 1979 the European Monetary System (EMS) was created,
fixing exchange rates onto the European Currency Unit (ECU), an accounting currency,
in order to stabilise exchange rates and counter inflation. It also created the European
Monetary Cooperation Fund (EMCF).[4]

In February 1986 the Single European Act formalised political co-operation within the
Community including competency in monetary policy.[4] European Council summit in
Hannover on 14 June 1988 began to outline monetary co-operation. France, Italy and
European Commission backed a fully monetary union with a central bank, which British
Prime Minister Margaret Thatcher opposed.[5]

[edit] Relaunch

President Delors' three point plan laid out the path to EMU

The Hannover European Council asked Commission President Jacques Delors to chair an
ad hoc committee of central bank governors to propose a new timetable with clear,
practical and realistic steps for creating an economic and monetary union.[6] This way of
working was derived from the Spaak method.

France and the UK were opposed to German reunification, and attempted to influence the
Soviet Union to stop it.[7] However, in late 1989 France extracted German commitment to
the Monetary Union in return for support for German reunification.[8]

The Delors report[9] of 1989 set out a plan to introduce the EMU in three stages and it
included the creation of institutions such as the European System of Central Banks
(ESCB), which would become responsible for formulating and implementing monetary
policy. It laid out monetary union being accomplished in three steps. Beginning the first
of these steps, on 1 July 1990, exchange controls were abolished, thus capital movements
were completely liberalised in the European Economic Community. Leaders reached
agreement on currency union with the Maastricht Treaty, signed on 7 February 1992. It
agreed to create a single currency, although without the participation of the United
Kingdom, by January 1999.[4]
Gaining approval for the treaty was a challenge. Germany was cautious about giving up
its stable currency, i.e. the German Mark,[10] France approved the treaty by a narrow
margin[11] and Denmark refused to ratify until they got an opt out from monetary union as
the United Kingdom, an opt-out which they maintain as of 2010.[12] On 16 September
1992, known in the UK as Black Wednesday, the British pound sterling was forced to
withdraw from the fixed exchange rate system due to a rapid fall in the value of the
pound.[13]

[edit] Second stage

Wim Duisenberg was the first President of the European Central Bank

Delors' second stage began in 1994 with creation of the European Monetary Institute,
succeeding the EMCF, under Maastricht. It was created as the forerunner to the European
Central Bank. It met for the first time on 12 January under its first President, Alexandre
Lamfalussy.[4] After much disagreement, in December 1995 the name euro was adopted
for the new currency (replacing the name Ecu used for the previous accounting currency),
[4]
on the suggestion of then-German finance minister Theo Waigel. They also agreed on
the date 1 January 1999 for its launch.[4]

On 17 June 1997 the European Council decided in Amsterdam to adopt the Stability and
Growth Pact, designed to ensure budgetary discipline after creation of the euro, and a
new exchange rate mechanism (ERM II) was set up to provide stability above the euro
and the national currencies of countries that hadn't yet entered the eurozone. Then, on 3
May 1998, at the European Council in Brussels, the 11 initial countries that would
participate in the third stage from 1 January 1999 were selected. In order to participate in
the new currency, member states had to meet strict criteria such as a budget deficit of less
than 3% of their GDP, a debt ratio of less than 60% of GDP, low inflation, and interest
rates close to the EU average. Greece failed to meet the criteria and was excluded from
participating on 1 January 1999.
On 1 June 1998 the European Central Bank succeeded the European Monetary Institute.
However it wouldn't take on its full powers until the euro was created on 1 January 1999.
The bank's first President was Wim Duisenberg, former head of the EMI and the Dutch
central bank.[4] The conversion rates between the 11 participating national currencies and
the euro were then established. 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 would equal one euro. 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. 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.

[edit] Creation
[edit] Launch

Eurozone (1999/2002)

The currency was introduced in non-physical form (traveller's 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. Beginning on 1 January 1999, all bonds and other forms of government
debt by Eurozone nations were denominated in euros.

On the first day of trading, 5 January, since its launch, the euro climbed to 1.19 USD. It
was rapidly taken up and dealers were surprised by the speed at which it replaced the
national currencies. Trading in the Deutsche Mark was expected to continue in parallel
but vanished as soon as the markets opened.[14] However, by the end of 1999 the euro had
dropped to parity with the dollar[4] leading to emergency action from the G7 to support
the euro in 2001.[15]
Later in 2000, Denmark held a referendum on whether to abandon their opt-out from the
euro. The referendum failed and also set back plans for a referendum in the UK as a
result.[16] However, Greece succeeded in getting clearance to join the euro on 1 January
2001, in time for the physical launch in 2002, by faking its deficit figures.[17] The
procedure used to fix the irrevocable conversion rate of 340.750 between the Greek
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 as a virtual currency, the conversion rate for the Greek
drachma was fixed several months beforehand, in Council Regulation 1478/2000 (EC), of
19 June 2000.

[edit] Minting

The Ecofin presenting the euro denominations 22 September 2001

The designs for the new coins and notes were announced between 1996 and 1998, and
production began at the various mints and printers early in 1999. The task was large, and
would require the full three years. In all, 7.4 billion notes and 38.2 billion coins would be
available for issuance to consumers and businesses on 1 January 2002.[18] In 7 nations, the
new coins, struck in the run-up to 1 January 2002, would bear a 2002 date. In Belgium,
Finland, France, the Netherlands, and Spain, the new coins would bear the date of
striking, so those 5 countries would be the only ones to strike euro coins dated 1999,
2000, and 2001. Small numbers of coins from Monaco, Vatican City, and San Marino
were also struck. These immediately became popular collector's items, commanding
premiums well above face value. New issues continue to do so to this day.

Meanwhile, a parallel task was to educate the European public about the new coins.
Posters were issued showing the designs, which were used on items ranging from playing
cards to T shirts. As a final step, on 15 December 2001, banks began exchanging "euro
starter kits", plastic pouches with a selection of the new coins in each country (generally,
between 10 and 20 euros worth—though Finland's contained one of each coin, totalling
€3.88). They would not be usable in commerce until 1 January, when notes would be
made available as well. Larger starter kits, containing a roll of each denomination, were
available as well in some nations.

Retailers and government agencies had a considerable task as well. For items to be sold
to the public, dual pricing was commonly utilised. Postage stamps for governments (as
well as stamps issued by the United Nations Postal Administration for the UN offices in
Vienna) often bore denominations both in the legacy currency and euros, assuring
continued utility beyond 2001. Banks bore a huge task, not only in preparation for the
change of the notes and coins, but also in the back office. Beginning in 1999, all deposits
and loans were technically in euros, but deposits and withdrawals continued in the legacy
currency. Statements would bear balances in both currencies beginning no later than 1
July 2001, and earlier if required by the customer's needs.

Beginning on 1 December 2001, coins and notes were distributed from secure storage,
first to large retailers, and then to smaller ones. It was widely expected that there would
be massive problems on and after 1 January. Such a changeover, across twelve populous
countries, had never been attempted before.

Euro banknotes and coins

As midnight struck to usher in 2002, a celebration took place outside European Central
Bank offices in Frankfurt. A huge illuminated mock-up of a euro coin was displayed in
front of the building.

When the celebration began, the new coins and notes had already been valid for one hour
in Greece and Finland. In fact, they had been valid for three hours on the French island of
Réunion in the Indian Ocean.[19] The first official purchase using euro coins and notes
took place there, for one kilogram of lychees.[20] The coming of midnight in Frankfurt at
the ECB offices, though, symbolised the transition.

In Finland, the Central Bank had opened for an hour at midnight to allow citizens to
exchange currency, while a huge euro pyramid had decorated Syntagma Square in
Athens, as the euro was welcomed to continental Europe. Other countries noted the
coming of the euro as well—Paris's Pont Neuf was decorated in EU colours, while in the
northern German town of Gifhorn a sombre, symbolic funeral for the Deutsche Mark
took place.

Except for Germany, the plan for introduction of the new currency was basically the
same. Banks would accept the exchange of legacy currencies, begin to dispense euros
from ATMs, and only euros would be available as withdrawals were made, beginning on
1 January. Merchants would accept legacy currency, but give change only in euros. In
Germany, the Deutsche Mark would no longer be a legal tender on 1 January, but would
have to be exchanged at the banks.
Despite the massive amounts of euros available, chaos was feared. In France, these fears
were accentuated by a threatened postal workers' strike.[21] The strike, however, was
settled. Similarly, workers at the French bank BNP Paribas threatened to disrupt the
introduction of euro currency with a strike. That was also settled.[22]

Preceding national currencies of the Eurozone v · d · e

Currency Code Rate Fixed on Yielded

Austrian schilling ATS 13.7603 31 December 1998 2002

Belgian franc BEF 40.3399 31 December 1998 2002

Dutch guilder NLG 2.20371 31 December 1998 2002

Finnish markka FIM 5.94573 31 December 1998 2002

French franc FRF 6.55957 31 December 1998 2002

German mark DEM 1.95583 31 December 1998 2002

Irish pound IEP 0.787564 31 December 1998 2002

Italian lira ITL 1,936.27 31 December 1998 2002

Luxembourgian franc LUF 40.3399 31 December 1998 2002

Monegasque franc MCF 6.55957 31 December 1998 2002

Portuguese escudo PTE 200.482 31 December 1998 2002

Sammarinese lira SML 1,936.27 31 December 1998 2002

Spanish peseta ESP 166.386 31 December 1998 2002

Vatican lira VAL 1,936.27 31 December 1998 2002

Greek drachma GRD 340.750 19 June 2000 2002

Slovenian tolar SIT 239.640 11 July 2006 2007

Cypriot pound CYP 0.585274 10 July 2007 2008

Maltese lira MTL 0.429300 10 July 2007 2008

Slovak koruna SKK 30.1260 8 July 2008 2009

 Estonian kroon EEK 15.6466 13 July 2010 2011

In practice, the roll-out was smooth, with few problems. By 2 January, all ATMs in 7
countries and at least 90 percent in 4 others were issuing euros rather than legacy
currency, with Italy, the worst offender, having 85% of ATMs dispensing euros.[23] The
unexpected tendency of consumers to spend their legacy currency, rather than exchange it
at banks, led to temporary shortages of euro small change, with some consumers being
given change in legacy currency.[24]

Some businesses did take advantage of the currency exchange to raise prices. According
to a study by the Deutsche Bundesbank, there was a price rise, but consumers refused to
buy as much. A coffee bar in Italy that took advantage of the transition to raise coffee
prices by a third was ordered to pay compensation to customers.[25]

[edit] Aftermath

Nations were allowed to keep legacy currency in circulation as legal tender for 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 after 31 December 2001. Most
member states, though, permitted their legacy currency to remain in circulation the full
two months. The legacy currency was exchangeable at commercial banks in the
currency's nation for a further period, generally until 30 June 2002.

However, even after the official dates, they continued to be accepted for exchange by
national central banks for varying periods—and indefinitely in Austria, Germany,
Ireland, and Spain. Coins from those four countries, Italy, and Finland remain
exchangeable. 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. All banknotes current on 1 January 2002 will remain
valid until at least 2012.[26]

Efforts to secure the return of German coins continue. In 2005, Deutsche Telekom
modified 50,000 pay phones to take Deutsche Mark coins, at least on a temporary basis.
[27]
Callers were allowed to use DM coins, at least initially, with the Mark pegged to equal
one euro, almost twice the usual rate.[28]

In France, receipts still indicate the value of products in the legacy currency along with
the euro value, as do receipts in Slovenia. In other eurozone countries this has long been
considered unnecessary. In June 2008, The New York Times reported that many
merchants in the French town of Collobrières, in Provence, choose to accept
exchangeable franc notes.[29]
Euro usage in the world (blue and purple, click for detail).

[edit] Early growth

Further information: International status and usage of the euro

After dropping to an interday low of $0.8296 on 26 October 2001, and a brief crash to
$0.8115 on 15 January 2002, the euro soon recovered from its early slump. Its value last
closed below $1.00 on 6 November 2002 ($0.9971), and increased rapidly from there. It
peaked at $1.35 in 2004, and reached its highest value versus the U.S. dollar at $1.5916
on 14 July 2008.[30] As its values increased against the pound sterling in the late-2000s,
peaking at 97.73p on 31 December 2008, its international usage grew rapidly.[31] The euro
grew in importance steadily, with its share of foreign exchange reserves rising from
nearly 18% in 1999 to 25% in 2003 - while the dollar share fell by an equivalent margin.
[32]
Alan Greenspan in 2007 said the eurozone had profited from the euro's rise and
claimed it was perfectly conceivable that it could trade equally or become more important
than the US dollar in the future.[33]