Photo: Will Spaetzel (Flickr)
The euro was introduced to the world on New Year’s Day 2002, when euro notes and coins replaced twelve national currencies.
The continental currency was created in the hopes that it would stimulate trade and strengthen the coordination of monetary policy among EU member states. Since 2002, five more countries have joined the euro zone.
The idea to introduce a single currency in Europe had been floated as early as 1969, when heads of state and government commissioned Luxembourg’s Prime Minister Pierre Werner to construct a blueprint for achieving monetary union.
Although the idea stalled for decades, the Maastricht Treaty, signed in 1991, formally laid out the path to a single currency. Maastricht, also known as the Treaty on European Union, created the European Central Bank, which would control monetary policy.
The treaty also set out economic performance indicators that countries would have to achieve before they would be allowed to adopt the euro, with the goal of making sure the currency was stable.
All states that join the European Union following Maastricht are required to adopt the euro once they have met the convergence criteria. Currently, seventeen of the EU’s 27 member states use the euro.
Indiana’s exports to euro zone countries were about two billion dollars in the year 2000, and by 2010 exports had increased to nearly six billion dollars. But ongoing debt crises in Greece and elsewhere have renewed questions about the Euro’s future.
This episode of One State One World is produced in partnership with the EU Center at Indiana University.
Read more about the European Union on the EU Center’s blog, Across the Pond.