1. EURO
The euro (symbol: €;
banking code: EUR) is the
currency of twelve
European Union member
states
2. The Twelve
Austria
Belgium
Finland
France
Germany
Greece
The Republic of Ireland
Italy
Luxembourg
The Netherlands
Portugal
Spain
3. History
The euro was established by the
provisions in the 1992 Maastricht
Treaty on European Union that was
used to establish an
economic and monetary union
The euro is administered by the
European System of Central Banks
(ESCB), composed of the
European Central Bank (ECB) and the
Eurozone central banks operating in
member states
4. The definitive values in euro of these subdivisions (which
represent the exchange rates at which the currency
entered the euro) are as follows:
Country Rate
Austria 13.7603
Belgium 40.3399
Finland 5.94573
France 6.55957
Germany 1.95583
Greece 340.750
Ireland 0.787564
Italy 1936.27
Luxembourg 40.3399
Netherlands 2.20371
Portugal 200.482
Spain 166.386
5. A New Reserve Currency
The euro will probably become one of
the major global reserve currencies.
Currently, international currency
exchange is dominated by the
American dollar.
If the euro were to become a reserve
currency it would benefit member
countries by lowering the on their
debts.
6. The Euro and Oil
The Eurozone consumes more imported
petroleum than the United States. This
would mean that more euros than US
dollars would flow into the OPEC nations,
but oil is priced by those nations in US
dollars only
There have been frequent discussions at
OPEC about pricing oil in euros, which
would have various effects, among them,
requiring nations to hold stores of euros to
buy oil, rather than the US dollars that they
hold now
7. Euro Exchange Rate Against USD
After the introduction of the
euro, its exchange rate against
other currencies, especially the
US dollar, declined heavily.
8. Advantages of the Euro
Elimination of exchange-rate fluctuations
Transaction costs
Price parity
Increased trade across borders
Increased cross-border employment
Simplified billing
Expanding markets for business
Financial market stability
Macroeconomic stability
Lower interest rate
Structural reform for European economies