| EURO |
The Euro
Currency:
History and Adoption (continued) |
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Next, the Single European Act was signed in 1986. This act revised the objectives
of the Treaty of Rome and was a commitment to create a single market by
the end of 1992. Subsequently, the heads of state and government of the European
Community asked the European Commission to develop a schedule for the implementation
of a common currency.
The Treaty on European Union was agreed to in Maastrict
in 1991. It went into
effect in November 1993 after ratification of the member states. It
called for an economic and monetary union by 1999 as well as a political union
including
foreign and security policy. This set the date for the launch of the
common
currency in the European Union (EU). However, Great Britain and Denmark
negotiated to keep their national currencies. Sweden opted out at a later
time.
| The European single market was achieved
as of January 1, 1993. In 1995 the European Council adopted the name
euro for the single currency. Then in 1998 eleven EU member states
qualified to be part of the Economic and Monetary Union when it began
on January 1, 1999. Greece joined as the 12th member in
January 2001.
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The European Central Bank was also inaugurated in June 1998 in Frankfurt,
Germany. The European Central Bank is part of the European System of
Central Banks.
Their primary mission is to maintain price stability and conduct monetary
policy for
the euro area. They were also responsible for managing the development
and introduction of the euro.
The euro was adopted by 11 member states
of the euro area on January 1, 1999. This is when the European Economic
and Monetary Union (EMU) went into
operation with the euro. At this point, the exchange rates of participating
currencies
were set and the 11 member states began implementing a common monetary
policy. Finally, on "January 1, 2001 the euro was introduced as legal
tender and old currency could no longer be used for non-cash transactions,
such as checks
and bank transfers" (Ref).
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One common denominator throughout the planning and preparation
of the introduction to the euro is that six countries remained involved
throughout the entire process. These countries included Belgium,
Denmark, Germany, Spain, France, Luxembourg, Netherlands, and Ireland.
It appears that each one of these countries was motivated to introduce
the euro in an effort to try to stabilize the economy and promote
trade. |
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