On Wednesday, July 13, 2022, the euro hit a one-to-one exchange rate with the dollar. This ratio between the two currencies hasn’t existed since December 2002. So, StatsFind investigated the history of the euro.
When and why did the euro enter the scene?
- The history of the euro traces back to the end of World War II.
- Milestones following World War II kept uniting Europe economically, leading to the euro’s creation and adoption.
- As of July 2022, the euro is the monetary unit of nineteen European Union countries and Kosovo and Montenegro.
Events leading up to the creation of the euro
The history of the euro traces back to the end of World War II. Then, each decade marked events that kept uniting Europe economically, leading to the euro’s creation and adoption.
May of 1945 saw the end of the war in Europe. There was so much devastation, including the deaths of an estimated six million Jews from the Holocaust. Several prominent men who had lived through two world wars worked to establish a peaceful Europe that valued “human rights, democracy, and the rule of law.” These included Winston Churchill, the Prime Minister of Britain, Paul-Henri Spaak, Prime Minister and Foreign Minister of Belgium, and Robert Schuman, French Republic Minister for Foreign Affairs.
The pioneering work of these men led to ten European countries establishing the Council of Europe in 1949.
The Council of Europe drew up The European Convention on Human Rights and Fundamental Freedoms in 1950 and started enforcing the convention through a court on September 3, 1953.
Shuman proposed creating the European Coal and Steel Community (ECSC), where countries would agree to share management of their coal and steel industries. That way, no one country can make weapons to use against the others. Six countries signed the treaty in 1952 (Germany, France, Italy, the Netherlands, Belgium, and Luxembourg), becoming the founding members of the ECSC.
Pleased with the accomplishments of the ECSC, the six countries expanded their collaboration to other economic areas. They signed two treaties in Rome in 1957, forming the European Economic Community (EEC) and the European Atomic Energy Community (Euratom). Among the goals of the EEC was to “reduce the economic and social differences between the EEC’s various regions.”
In 1962, the EEC established the first common agricultural policy, giving the member countries shared control over food production. As a result, there was sufficient food across these countries, and farmers’ quality of life improved.
Then, in 1968, the member countries of the EEC removed customs duties on products imported from each other, initializing free cross-border trade. Furthermore, they applied the same duties on imports from non-EEC countries. This act rapidly increased trade among the six countries and the rest of the world.
On January 1, 1973, three more countries joined the European Community (the term used when referring to the EEC, ECSC, and Euratom as a group). These countries were Denmark, Ireland, and the United Kingdom.
Following the 1973 oil crisis, EEC leaders agreed to create a fund under European regional policy. This fund aimed to shift money from wealthier regions to poorer ones. The funds went to improving infrastructure, attracting investment, and creating jobs.
Between 1974 and 1975, Portugal, Greece, and Spain saw the fall of their dictatorships and the establishment of democracy. These countries then qualified for membership into the European Community.
On January 1, 1981, Greece became the 10th member of the European Community. Spain and Portugal joined in 1986.
July 1, 1987, saw the Single European Act come into force, aiming to create a single market in the European Community.
On February 7, 1992, representatives from the member countries met in Maastricht in the Netherlands and signed the Treaty on European Union. It was a momentous occasion, establishing clear criteria for several policies, including the future single currency. The European Community became the European Union (EU) with this treaty.
On January 1, 1993, the single market went into effect, permitting the free movement of people, money, goods, and services.
January of 1995 saw the addition of Austria, Finland, and Sweden to the EU, bringing the total member countries to 15. 1995 also revealed the name of the EU’s future currency: the euro.
The birth of the euro
On January 1, 1999, 11 countries adopted the euro. Initially, the new currency was available for electronic commercial and financial transactions. The printed form of notes and coins became available in 2002.
The following table list each country that adopted the euro in date order:
|Country||Old currency||Year of euro adoption|
|France, Monaco, Andorra||French franc||1999|
|Italy, San Marino, Vatican City||Italian lira||1999|
|Spain, Andorra||Spanish peseta||1999|
|Kosovo (not EU)||Deutsche Mark||2002|
|Montenegro (not EU)||Deutsche Mark||2002|
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