The Single Currency
The single currency
On January 1st 2002, the Euro became the single currency for more than 300 million Europeans, divided among 12 EU countries (the Euro area).
It is the result of a long thought process, of the preparation of national economies, and of the transition towards the Euro.
1969: at The Hague summit, the six member states of the European Economic Community (EEC), set the target of a Economic and Monetary Union (Barre plan).
1971: the Werner plan proposes a convergence of national economies in order to endow the EEC with a single currency. However, the unsteadiness of the European currencies highly sign away this project.
1972: the control of the European currencies fluctuation is introduced with the creation of the European currency snake, and in 1979 with the European Monetary System (EMS).
1986: the Single European Act includes in the Treaty of Rome the objective of a progressive achievement of a Economic and Monetary Union (EMU).
1990: first stage of the EMU with the free movement of capitals.
1992: the Maastricht Treaty defines convergence criteria between participant countries economies, the first step towards the single currency.
May, 2nd 1998: the European Council draws up the list of participants: Austria, Belgium, Finland, France, Germany, Italy, Ireland, Luxembourg, the Netherlands, Portugal and Spain (Greece joined in 2001).
June, 1st 1998: establishment of the European Central Bank (ECB), in charge of the European Monetary Policy.
January, 1st 1999: the Euro becomes the single currency. The exchange rate is irrevocably set between the Euro and national currencies ( 1Euro = 6.55957 FF). Transactions on the capital markets are made in Euro.
January, 1st 2002: the Euro comes into effect in the 12 participant countries.
February, 17th 2002: the French franc disappears.
Changing currency implies that consumers, firms and public services have to make an effort to adapt.
Many aspects of everyday life need some adjustment: price marking, bank accounts conversion, creating billions of new coins and banknotes, withdrawal of the francs, ...
What is the use of a single currency? The European economy is a vast single market. The EU member states achieve most of their trade within Europe.
Exchange problems will disappear with the Single currency , and it will also help the European construction by giving an international currency to Europe. By making exchanges and investments easier, states from the Euro area also seek to increase employment in Europe.
The Euro. From January, 1st 2002, some 15 billion banknotes and 60 billion coins will be put into circulation within the Euro area.
Coins : In order to symbolise the union and the diversity of Europe, the coins comprise a side common to the 12 Euro area countries ( recognisable by the 12 symbolic stars) and a national side.
In France, 3 symbols decorate the national side of the coins: the Marianne (representing the Republic and freedom), a tree (symbol of life) and the Sower (an allegory for fertility). All the coins can circulate within the Euro area, regardless of their national side.
Banknotes : Three elements are printed on the banknotes : portals and windows on the front, bridges on the back. These elements are inspired by the seven architectural styles that have market the European culture: Classical, Romanesque, Gothic, the Renaissance, the Baroque and the Rococo, iron and glass architecture and finally, modern architecture.
The Franc official exchange rate : 1 = 6,55957 FF