Europe and the world

The history of the euro lies at the heart of the history of European integration.
Here is a reminder of the key dates in European integration:

1951: Treaty of Paris: European Coal and Steel Community (ECSC)
1957: Treaty of Rome: Creation of the European Economic Community (EEC)
1969: Customs Union: Introduction of common external customs tariffs
1986: Single Act: Amendment of the Treaty of Rome; commitment to political cooperation
1992: Treaty of Maastricht: Creation of the European Union (EU), which takes the place of the EEC

The path towards the euro has been a long process spread over several stages.

In 1969, at the Summit held in The Hague, the six countries of the EEC set themselves the objective of creating an Economic and Monetary Union and decide to implement it in stages.

In 1970 the Werner Plan proposes convergence of the individual EEC national economies in order to create the requisite base for the single currency. The future of the Plan is called into question by the instability of the European currencies.

In 1972, in order to control European currency fluctuations, the European currency "snake" lays down restricted exchange rate fluctuation margins.

In 1979, the European Monetary System gives each currency an official rate against a new common currency unit, the ECU (European Currency Unit).

In 1986 the Single Act enshrines in the Treaty of Rome the objective of gradually attaining Economic and Monetary Union (EMU).

In 1990 the free circulation of capital represents the first stage of EMU.

In 1992 the Treaty of Maastricht is signed, providing for the creation of not only economic and monetary union but also political union. It sets out the criteria for convergence between the national economies prior to the introduction of the single currency. Only those countries, which meet these prior conditions, will be eligible for Monetary Union and the single currency.

In 1993 the Treaty comes into force in the 15 Member States.

Community governments and institutions lay the groundwork for the transition to the single currency in a difficult international environment. This is the convergence of national economic policies stage.

• The name "euro", which is more readily understand and accepted by everyone, is chosen in preference to "ecu".
• At the monetary level, the technical preparations are carried out by the EMI, the European Monetary Institute : greater cooperation between national central banks, preparation of the instruments that will be necessary to implement the single monetary policy.
• In May 1998 the European Council, which brings together heads of state or government, decides on the list of the eleven "in" countries that will form the euro zone : Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. The United Kingdom and Denmark prefer to wait and see under the terms of the "opt out" clause. Greece is not included since it does not meet the convergence criteria (it will eventually join the group of countries making up the euro zone on 1 January 2001, on the basis that it does now meet these criteria). Sweden decides against joining EMU for the time being.
• Ministers of Finance meeting in the Council of Ministers of the European Union set the bilateral conversion rates between the currencies of the Member States that will apply with effect from 1 January 1999. They adopt the regulations establishing the legal framework for the transition to the euro.
• In June 1998 European Central Bank (ECB) is created, forming, together with national central banks (the Bank de France for France), the European System of Central Banks (ESCB), which is given responsibility for ensuring price stability and implementing the single European monetary policy.

1 January 1999: Creation of the single European currency.

• EMU comes into force and the euro becomes the single currency. The ECU is replaced by the euro at a rate of 1 ECU for 1 euro.
• The conversion rates between the euro and national currencies are irrevocably fixed (for France : 1 euro = 6.55957 francs).
• The ECB, the European Central Bank, defines and implements the euro zone single monetary policy, the practical execution of which is carried out by national central banks.
• A new European exchange rate mechanism ties the currencies of the European Union countries that are not yet members of the euro zone to the euro. The euro is traded normally against other currencies, such as dollar, the yen and the currencies of other European countries outside the euro zone.

With effect from 4 January 1999 (the first working day of 1999) the financial markets switch over to the euro: securities and UCITS are quoted in euros.

1999-2002 is a transitional period for businesses, public authorities and private individuals, who gradually make the transition to euro at their own speed, in accordance with a national transition to the euro plan. Prices are displayed in both euros and national currencies.

Autumn 2001: Adaptation of cash point machines.
December 2001: Shopkeepers to be provided with stocks of euros so that they can give change with effect from January 2002.
With effect from 15 December 2001 "euro wallets" to go on sale in France, offering 40 coins for 100 francs (15.24 euros); available for private individuals who wish to familiarise themselves with the euro coins.
31 December 2001: last date for using national currencies in their bank money form (cheques, bank transfers, credit card transactions, direct debits, on-line payments etc).

• 1 January 2002 : Euro notes and coins come into circulation. They will circulate alongside national coins and notes, up to 17 February 2002 in France. The changeover to the euro will be completed. Wages and salaries, taxes, rents, social security benefits etc will be paid in euros, prices in the shops will be displayed in euros and purchases will be made in the new currency.
• All payments in bank money form will be made solely in euros with effect from 1 January 2002. Bank accounts will be converted into euros at no charge to customers.
• Up to 30 June 2002 private individuals will still be able to exchange their francs for euros at the banks. After that date, the Trésor Public and the Bank de France will agree to exchange coins for 3 years and notes for 10 years.

In the two years since it was first introduced, the euro has had a clearly positive impact. It has contributed in large measure to helping countries in the euro zone withstand the various exogenous economic shocks that have occurred, has played an important role in international financial markets, particularly bond markets, and, lastly, has been a catalyst in the transformation and restructuring of European economies. For the 302 million persons living in 12 different states of the European union which, since January 1 1999, have had the euro as their common currency, it represents a symbol of unity and a factor that encourages political integration. It represents tangible evidence of a community of nations that has taken its destiny into its own hands.

In the two years since it was first introduced, the euro has had a clearly positive impact. It has contributed in large measure to helping countries in the euro zone withstand the various exogenous economic shocks that have occurred, has played an important role in international financial markets, particularly bond markets, and, lastly, has been a catalyst in the transformation and restructuring of European economies. For the 302 million persons living in 12 different states of the European union which, since January 1 1999, have had the euro as their common currency, it represents a symbol of unity and a factor that encourages political integration. It represents tangible evidence of a community of nations that has taken its destiny into its own hands.