Establishment and declaration
The euro was first established and declared under the auspices of the 1992 Maastricht Treaty. In order to use the currency, member countries must meet certain criteria including:
• Having a budget deficit of less than 3% of their GDP
• Having a debt ratio of less than 60% of their GDP
• Low inflation and interest rates near to the current EU average.
As a part of the Maastricht Treaty, the UK and Denmark were granted exemptions from joining the euro and kept their original currency.
Famous and respected economists were involved in developing the euro including:
• Robert Tollinson
• Wim Duisenberg
• Robert Mundell
• Tommaso Padoa-Schioppa
• Fred Arditti
• Neil Dowling
The currency was named the euro on the 16th of March 1995 in Madrid, Spain. Germain Pirlot (a Belgian Esperantists) is widely credited with coming up with the name by sending it in a letter to Jacques Santer (the then President of the European Commission).
The process of conversion was a long-winded and thorough one; different nations had different methods of rounding significant digits so all conversion had to be done via the painstaking method of triangulation.
Confirmation of the Euro exchange rate
The Council of the European Union ended up confirming the rates based on the European Commission’s recommendations on the market rates. Essentially one ECU (European Currency Unit) would equal one euro. ECU was not a currency in its own right; it was just a way to proportionately describe the value of the member states’ original currencies.
Greek drachma process
The process to align the Greek drachma was slightly different as the euro was already two years old by this point. The conversion rate was fixed well in advance, rather than two months before the launch of the euro which was the case with the other member states.
Non-physical currency was introduced on the 1st of January 1995, and by non-physical, I mean the likes of traveler’s cheques and electronic transfers; this mirrored the time that the national currencies of the member states ceased to be individual entities. Their exchange rates became fixed and the euro took over from the ECU; notes and coins continued to be legal tender until the 1st of January 2002 when new notes and coins were introduced.
The actual changeover period lasted for about two months until the end of February 2002 and the actual date where a nation’s old currency ceased being legal tender varied wildly from country to country. Germany was the first to declare the mark as non-legal tender, though the Portuguese escudos were the earliest to be classed as non-convertible.
Here is a list of the standard spellings in each language of the words ‘euro’ and ‘cent’ (nominative form, both singular and plural) – (62 kB)
Download a vectorial image with constructions. – (575 kB)
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