Difference between revisions of "Euro"

From Conservapedia
Jump to: navigation, search
m
(Value: HTTP --> HTTPS, replaced: http://www.telegraph.co.uk → https://www.telegraph.co.uk)
(37 intermediate revisions by 24 users not shown)
Line 1: Line 1:
 
[[Image:Euro banknotes.png|right|thumb|Euro banknotes|300px]]
 
[[Image:Euro banknotes.png|right|thumb|Euro banknotes|300px]]
The '''Euro''' is the common [[currency]] in the Eurozone (a group of 13 [[European Union]] states) today. Use of the euro began in January 2002, and 12 nations switched their currency immediately to the euro. It is the counterpart to the dollar in the United States.  Countries within the European Union were able to join the Common Currency if they meet 4 criteria (known as the 'convergence criteria'. These were:<br />
+
The '''euro''' is the common [[currency]] in the Eurozone (a group of 18 [[European Union]] member states with a [[population]] of 320 million), five other states with formal agreements to use it, and four others without formal agreement. Use of the euro began in January 2002, and 12 nations switched their currency immediately to the euro. There was more than €610 billion in circulation in December 2006 (worth US$802 billion at the time), hence the euro had the highest value of [[cash]] in circulation in the world, then having surpassed the [[Dollar (U.S.)|U.S. dollar]].<ref>{{cite web| last = Atkins| first = Ralph| title = Euro notes cash in to overtake dollar| publisher = Financial Times|date=2006-12-27| url = http://www.ft.com/cms/s/18338034-95ec-11db-9976-0000779e2340.html| accessdate = 2007-05-04}}</ref>
1. The budget deficit must be below 3% of GDP (the difference between government receipts and expenditures.)<br />
+
2. The total government debt must be below 60% of GDP.<br />
+
3. The country must have an inflation rate within 1.5% of the lowest 3 inflation rates of EU countries.<br />
+
4. Nominal Long-term interest rates must be within 2% of the interest rate of countries with the lowest 3 inflation rates.<br />
+
  
In addition to these criteria a country must have 'normal' fluctuations of it's currency. (That is, within the margins allowed.)
+
==Creation==
It is perhaps worth noting that countries were allowed to join the common currency if their budget deficit and total government debt were approaching the reference values at a 'satisfactory pace', not necessarily actually on them. 
+
In January 1999 the [[exchange rate]]s of countries that had passed the criteria (and were not exercising an opt-out) were fixed to the euro.  The [[European Central Bank]] ([[ECB]]) came into being. Euro coins and notes were introduced to the general public on the 1st of January 2002 as [[legal tender]], alongside national [[currencies]]. In March 1998, when the calculations in countries that had met the convergence criteria were finalized, eleven countries were admitted to join the [[European Monetary Union]]: [[Austria]], [[Belgium]], [[Finland]], [[France]], [[Germany]], [[Ireland]], [[Italy]], [[Luxembourg]], [[Netherlands]], [[Portugal]] and [[Spain]]. In June 2000 [[Greece]] was admitted. [[Slovenia]] joined in 2007, and [[Malta]] and [[Cyprus]] joined in 2008. Since 2011 the Euro is the currency of [[Estonia]]. On January 1, 2014 the Euro was imported in [[Latvia]]. In 2015 [[Lithuania]] joined the Euro zone.
In January 1999 the exchange rates of countries that had passed the criteria (and were not exercising an opt-out) were fixed the the Euro.  The European Central Bank (ECB) came into being. Euro coins and notes were introduced to the general public on the 1st of January 2002 as legal tender, alongside national currencies. Initially in March of 1998, when the calculations as to which countries had met the convergence criteria occured, 11 countries, Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain were admitted to join the European Monetary Union. In June of 2000 Greece was admitted.  
+
  
In the United Kingdom the currency is still the [[pound]], but there is pressure to convert to the euro that is used throughout Europe. As of 2007 the United Kingdom and Denmark are the only European Union member countries with an 'opt-out' (allowing them to select not to join the common currency despite meeting the criteria). In addition to the four criteria of entry set out in the Maastricht Treaty the Chancellor of the Exchequer laid out 5 tests Many conservatives in England ([[Tories]])resist conversion to the European currency because a reliance on someone else's currency represents a loss in sovereignty and control. For exactly the same reason, English socialists tend to reject the euro as well. In particular, there is fear of England becoming dependent on the fiscal policies of the larger combination of Germany, Italy, and France.
+
==Criteria for adoption==
 +
Countries within the European Union were able to join the Common Currency if they met four criteria (known as the 'convergence criteria').  These were:<br />
 +
1. The [[budget deficit]] must be below 3% of [[GDP]] (the difference between [[taxes|government receipts]] and expenditures.)<br />
 +
2. The total [[national debt|government debt]] must be below 60% of GDP.<br />
 +
3. The country must have an [[inflation]] rate within 1.5% of the lowest 3 inflation rates of EU countries.<br />
 +
4. Nominal Long-term [[interest]] rates must be within 2% of the [[interest rate]] of countries with the lowest 3 [[inflation rate]]s.<ref name="ec.europa.eu">http://ec.europa.eu/economy_finance/euro/adoption/who_can_join/index_en.htm</ref><br />
 +
 
 +
In addition to these criteria a member state's currency must fluctuate within the margins allowed. Countries were allowed to join the common currency if their budget deficit and total [[government debt]] were approaching the reference values at a 'satisfactory pace', but not actually on them.
 +
 
 +
==Non-participant members==
 +
In the [[United Kingdom]] the currency is still the [[pound]], but before the Eurozone crisis there was pressure to convert to the Euro that is used throughout Europe. The [[UK]] and [[Denmark]] are the only European Union member states with an 'opt-out' (allowing them to select not to join the common currency despite meeting the criteria). In addition to the four criteria of entry set out in the [[Maastricht Treaty]] the Chancellor of the Exchequer laid out 5 economic tests the United Kingdom must meet to join; at the last report it had met one, with three others dependent on the final condition which had not been met. Many [[conservative]]s in the UK ([[Tories]]) resist conversion to the European currency because a reliance on a common currency represents a loss in [[sovereignty]] and control. In particular, there is fear that joining the synchronized EU policy may result in sub-optimal interest rates in difficult periods.<ref name="ec.europa.eu"/>
 +
 
 +
==Value==
 
[[Image:626px-Euro coins version II.png|right|thumb|300px|Euro coins]]
 
[[Image:626px-Euro coins version II.png|right|thumb|300px|Euro coins]]
Initially the value of the Euro fell on the exchange markets, while many expected it to do the opposite. However it has strengthed of recent times partly due to the falling value of the dollar. The ECB is charged with maintaining the inflation rate in the Eurozone between 0 and 2%.
+
Initially the value of the euro fell on the exchange markets, while many expected it to do the opposite. However it has strengthened in the years since, partly due to the falling value of the dollar. The ECB is charged with maintaining the inflation rate in the Eurozone between 0 and 2%.
 +
 
 +
By the end of 2006, after about five years of the euro, a French magazine Le Pèlerin reported that 52% of the [[French]] feel that the euro is a "bad thing", blaming it for price hikes and [[job loss]]es. 71% of French [[blue-collar workers]] said that euro has hurt them personally.<ref>[https://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/28/cneuro28.xml  French hostility to euro begins to gather pace], The Telegraph, 27 December 2006</ref>
 +
 
 +
As of January 2012, the euro is worth approximately [[US]]$1.27 and GB£0.82.<ref>http://www.xe.com/</ref>
 +
 
 +
== See also ==
 +
*[[Eurozone Crisis]]
  
By the end of 2006, after about five years of the euro, a French magazine reported that 52% of the French feel that the euro is a "bad thing".  French workers now blame the euro for price hikes and job losses.  71% of French [[blue-collar workers]] say the euro has hurt them personally.  The Telegraph, 12-27-06.
+
==References==
 +
{{reflist}}
  
As of March 2007, the euro is worth approximately US$1.30 or GB£0.70.
 
  
 
[[Category:Currency]]
 
[[Category:Currency]]
 
[[Category:Europe]]
 
[[Category:Europe]]
 +
[[Category:Investments]]
 +
[[Category:Economics]]
 +
[[Category:Coins]]

Revision as of 11:40, April 2, 2019

Euro banknotes

The euro is the common currency in the Eurozone (a group of 18 European Union member states with a population of 320 million), five other states with formal agreements to use it, and four others without formal agreement. Use of the euro began in January 2002, and 12 nations switched their currency immediately to the euro. There was more than €610 billion in circulation in December 2006 (worth US$802 billion at the time), hence the euro had the highest value of cash in circulation in the world, then having surpassed the U.S. dollar.[1]

Creation

In January 1999 the exchange rates of countries that had passed the criteria (and were not exercising an opt-out) were fixed to the euro. The European Central Bank (ECB) came into being. Euro coins and notes were introduced to the general public on the 1st of January 2002 as legal tender, alongside national currencies. In March 1998, when the calculations in countries that had met the convergence criteria were finalized, eleven countries were admitted to join the European Monetary Union: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain. In June 2000 Greece was admitted. Slovenia joined in 2007, and Malta and Cyprus joined in 2008. Since 2011 the Euro is the currency of Estonia. On January 1, 2014 the Euro was imported in Latvia. In 2015 Lithuania joined the Euro zone.

Criteria for adoption

Countries within the European Union were able to join the Common Currency if they met four criteria (known as the 'convergence criteria'). These were:
1. The budget deficit must be below 3% of GDP (the difference between government receipts and expenditures.)
2. The total government debt must be below 60% of GDP.
3. The country must have an inflation rate within 1.5% of the lowest 3 inflation rates of EU countries.
4. Nominal Long-term interest rates must be within 2% of the interest rate of countries with the lowest 3 inflation rates.[2]

In addition to these criteria a member state's currency must fluctuate within the margins allowed. Countries were allowed to join the common currency if their budget deficit and total government debt were approaching the reference values at a 'satisfactory pace', but not actually on them.

Non-participant members

In the United Kingdom the currency is still the pound, but before the Eurozone crisis there was pressure to convert to the Euro that is used throughout Europe. The UK and Denmark are the only European Union member states with an 'opt-out' (allowing them to select not to join the common currency despite meeting the criteria). In addition to the four criteria of entry set out in the Maastricht Treaty the Chancellor of the Exchequer laid out 5 economic tests the United Kingdom must meet to join; at the last report it had met one, with three others dependent on the final condition which had not been met. Many conservatives in the UK (Tories) resist conversion to the European currency because a reliance on a common currency represents a loss in sovereignty and control. In particular, there is fear that joining the synchronized EU policy may result in sub-optimal interest rates in difficult periods.[2]

Value

Euro coins

Initially the value of the euro fell on the exchange markets, while many expected it to do the opposite. However it has strengthened in the years since, partly due to the falling value of the dollar. The ECB is charged with maintaining the inflation rate in the Eurozone between 0 and 2%.

By the end of 2006, after about five years of the euro, a French magazine Le Pèlerin reported that 52% of the French feel that the euro is a "bad thing", blaming it for price hikes and job losses. 71% of French blue-collar workers said that euro has hurt them personally.[3]

As of January 2012, the euro is worth approximately US$1.27 and GB£0.82.[4]

See also

References