About euro

1. EURO
Executed by Tetiana
Olinycheno
The 2nd year student of
MEO program
by Specialty “Economic and
Organization of Enterprises”

2. What does it mean “euro”?
The euro is the single currency shared by
(currently) 18 of the European Union's Member
States, which together make up the euro area.
The euro is the second largest reserve currency as
well as the second most traded currency in the
world after the United States dollar.
The euro zone is the second largest economy in
the world.1

3. History of the euro
The1st
step
• The currency was introduced in non-physical
form (electronic transfers, banking, etc.) at
midnight on 1 January 1999, when the national
currencies of participating countries (the
Eurozone). On the first day of trading, 5
January, the euro climbed to 1.19 US$.
The2nd
step
• Since 1 January 2002 the euro has been circulating
in physical form, as banknotes and coins. The euro
is not the currency of all EU Member States.

4. The euro and Economic and
Monetary Union
All EU Member States form part of Economic and
Monetary Union (EMU), which can be described as an
advanced stage of economic integration based on a
single market. It involves close co-ordination of
economic and fiscal policies and, a single monetary
policy and a single currency - the euro. These
conditions are known as the 'convergence criteria' (or
'Maastricht criteria') and include low and stable
inflation, exchange rate stability and sound public
finances.

5. Who manages it?
• With the launch of the euro monetary policy
became the responsibility of the independent
European Central Bank (ECB), which was created
for that purpose, and the national central banks
of the Member States having adopted the euro.
Together they compose the Eurosystem.

6. Who uses it?
The euro is the currency of the 333 million people
who live in the 18 euro area countries. It is also used,
either formally as legal tender or for practical
purposes, by other countries such as close
neighbours and former colonies. The euro has
become the second most important international
currency after the dollar.

7. Global currency reserves

8. Why do we need it?
Apart from making travelling easier within the EU, a
single currency makes economic and political sense.
The framework under which the euro is managed
underpins its stability, contributes to low inflation and
good sound public finances. A single currency is also a
logical complement to the single market and
contributes to making it more efficient. Last but not
least, the euro gives the EU’s citizens a tangible
symbol of their European identity.

9. Which countries have adopted
the euro - and when?
Year Country
1999 Belgium, Germany, Ireland, Spain, France, Italy, Luxembourg,
the Netherlands, Austria, Portugal and Finland
2001 Greece
2002 Introduction of euro banknotes and coins
2007 Slovenia
2008 Cyprus, Malta
2009 Slovakia
2011 Estonia
2014 Latvia

10. Eurozone map in 1999 - 2002

11. Economic and Monetary Union of
the European Union (EMU 2014)
Two countries (Denmark and the
United Kingdom) have ‘opt-out’
clauses in the Treaty exempting
them from participation
In February 2013, the government
of Lithuania approved a plan for
euro adoption in 2015. However,
Lithuania has not yet met all the
economic criteria necessary to join
the euro.

12. The United Kingdom's currency is the pound
sterling and it has not declared plans to adopt
the euro in the foreseeable future. British public
opinion has consistently opposed joining the euro.
Opinion polls 19–21 December 2008, 71% of
respondents said they would vote No whilst 23% of
participants would vote Yes, and 6% were
undecided.
Denmark uses the krone as its currency and
does not use the euro, having negotiated an
opt-out from participation under
the Edinburgh Agreement in 1992. In 2000,
the government held a referendum on
introducing the euro, which was defeated

13. Convergence criteria of
Lithuania
Assessme
nt month
Country
inflation
rate
Budget deficit to
GDP
Debt-to-
GDP ratio
ERM II
member
Long-
term intere
st rate
2012 Repo
rt
Reference
values
max.
3.1%
(31 Mar
2012)
max. 3.0%
(Fiscal year
2011)
max. 60%,
or
decreasing
(Fiscal year
2011)
min. 2
years
(31 Mar
2012)
max.
5.80%
(31 Mar
2012)
Lithuania 4.2% 5.5% 38.5%
28 June
2004
5.19%
April 2013
Reference
values
max.
2.5%
(as of 31
Mar
2013)
max. 3.0%
(Fiscal year
2012)
max. 60%,
or
decreasing
(Fiscal year
2012)
min. 2
years
(as of 31
Mar 2013)
max.
4.81%
(as of 31
Mar 2013)
Lithuania 2.8% 3.2% 40.7%
28 June
4.53%

14. Benefits of the EURO
1. Transaction Costs
2. Price Transparency
3. 3. Eliminating Exchange Rate uncertainty
4. 4. Improvement in Inflation Performance.
5. 5. Euro could emerge as a global trading
currency
6. Inward investment
7. Economizing on foreign currency reserves

15. Potential adoption by
other countries
• EU – Bulgaria, Croatia, Czech Republic,
Denmark, Lithuania, Hungary, Poland,
Romania, Sweden, United Kingdom.
• Non- EU Iceland, Kosovo,
Montenegro.

16. Bibliography
1. http://ec.europa.eu/economy_finance/euro/index_en
.htm
2. "By the third protocol to the Cyprus adhesion Treaty
to EU and British local ordinance“
3. EMU: A Historical Documentation (European
Commission)
4. Hacker, Björn (2013): On the Way to a Fiscal or a
Stability Union? The Plans for a »Genuine« Economic
and Monetary Union, FES, online
at: http://library.fes.de/pdf-files/id/ipa/10400.pdf
5. http://www.euro-dollar-currency.com/index.htm
6. http://ec.europa.eu/internal_market/index_en.htm

17. Thank you for your attention
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Дякую за вашу увагу
Grazie per la vostra attenzione
Vielen Dank für Ihre Aufmerksamkeit
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