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European currency (Euro, EUR) in forex

Fact 1 - In 1998, the third stage of the Economic and Monetary Union (EMU) was launched with the establishment of a European Central Bank (ECB) in Frankfurt, Germany to manage the introduction of a new single pan-European currency. The name chosen for the basic denomination of this currency was the euro.

The introduction of the euro will be one of the major economic events in the next decade. A common currency will contribute significantly to the further economic integration of the participating countries. It will increase market transparency by making prices more easily comparable. Pan-European trade will become more attractive as trade and investment will no longer be exposed to exchange-rate risks, and the costs associated with currency conversion will be eliminated. Eleven countries qualified for initial membership of the EMU: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Portugal, Spain, and The Netherlands.

On January 1, 1999, the rate of conversion between the euro and the currencies of the eleven participating countries will be irrevocably fixed, and the ECB will begin the administration a single monetary policy. On this date, the euro, in non-cash form, will become legal tender in these countries. This means that the euro will be usable for non-cash transactions such as checks and credit transfers.

On January 1, 2002, new euro banknotes and coins will be put into circulation. Over a period of time, determined by each participating country, notes and coinage in the national currency will be withdrawn from circulation. By July 1, 2002, euro notes and coins will be the only legal tender in the participating countries.

Currency Symbol

The European Commission has introduced a new currency symbol to represent the new currency and has registered the currency code EUR with the ISO 4217 (Currency Codes) Maintenance Agency as representing this currency.

Fact 2 - The euro is divided into 100 Cents. In each language, the form "cent" is officially required to be used in legislation in both the singular and in the plural, though in English (and French) the natural plural cents is recommended for use in material aimed at the general public. (For more information on language and the euro, see Linguistic issues concerning the euro.)

All euro coins (including the ?ぎ2 commemorative coins) have a common side showing the denomination (value) and a national side showing an image specifically chosen by the country that issued the coin ; the monarchies often have a picture of their reigning monarch, other countries usually have their national symbols. All coins can be used in all member states: for example, a euro coin bearing the image of the Spanish King is legal tender not only in Spain, but also in all other member states where the euro is in use. There are ?ぎ2, ?ぎ1, 50c, 20c, 10c, 5c, 2c and 1c coins, though the latter two are not generally used in Finland or the Netherlands (but are still legal tender).

All euro banknotes have a common design for each denomination on both sides. Notes are issued in the following values: ?ぎ500, ?ぎ200, ?ぎ100, ?ぎ50, ?ぎ20, ?ぎ10, ?ぎ5. Some of the higher denominations are not issued in a few countries, though again, are legal tender.

Fact 3 - Joining a Single European currency would have profound political and economic consequences for Britain. Replacing 15 national currencies by a single currency controlled through one central bank is an undertaking perhaps greater than the original founding of the EEC. Under the terms of the Treaty on European Union Britain must decide next year whether to participate.

Many advocate a single currency on political grounds. According to their view the stalled process of political integration would be given a huge boost by the creation of a European Economic State. The necessary concentration of monetary and economic power at the centre is seen as a virtue. The Community, founded as an economic entity, would achieve its political destiny through another economic union, based this time not on trade but on a single currency.