As you may already know, although plans have been on ground since the 1960s, the euro was first introduced on 1 January 1999, by the European Union (EU) and its predecessors. In 1999, after several hardcore negotiations between members of the EU, especially as a result of the opposition from the United Kingdom (UK), a treaty (called The Maastricht Treaty) was adopted. The goal of this treaty was mainly to have created an economic and monetary union by 1999 for all EU states except the UK.
Despite being virtually introduced in 1999, it was not until 2002 that euro coins and notes began to circulate among member nations. After its introduction, it did not take long before EU member countries began to completely replace their national currencies with the euro; as it slowly expanded behind the rest of the EU.
The Euro was first introduced in the form of traveller’s cheques, banking, electronic transfers, etc. – non-physical forms to be more specific. This was at midnight on 1 January 1999, when the national currencies of participating countries (often referred to as the Eurozone) ceased to independently exist; that is, their exchange rates were locked at fixed rates against each other, effectively making them mere non-decimal subdivisions of the euro. This simply meant the euro succeeded the European Currency Unit (ECU). The notes and coins for the old currencies, however, continued to be used as legal tender until new notes and coins were introduced on 1 January 2002. Beginning on 1 January 1999, all bonds and other forms of government debt by Eurozone nations were denominated in euros.
Initially, there were 15 member countries in the EU who welcome the use of euros as a legal tender. Some of these members include: France, Portugal, Austria, Germany, Ireland, Spain, etc. As time went on, more and more countries are continually welcomed into the European Union and they adopt the euro. Between 2007 and 2009, several states from the 2004 enlargement signed up to the eurozone. There was Slovenia in 2007, Cyprus and Malta in 2008 and Slovakia in 2009; with Estonia expected to be confirmed early in 2011.
After its first release, the euro suffered a slump possible due to the effects member countries’ economic had on it upon adopting it as a main trading currency or, perhaps, due to the struggle for the population to accept its introduction. However, it soon recovered from this early slump and its value increased rapidly; exceeding $1.50 in 2009 as its international usage grew rapidly.
Since that time, the euro’s value has grown in importance steadily, with its share of foreign exchange reserves rising from nearly 18% in 1999 to 25% in 2003 – while the dollar share (and other world currency rates) fell by an equivalent margin; a development which the eurozone notably profited well from.
